Nextracker Inc. (NXT): Hedge Funds Are Pouring In—Is This Solar Leader a Buy?

The solar energy sector is on fire, and Nextracker Inc. (NASDAQ: NXT) is at the center of the action. Hedge funds are piling into the company’s shares at a breakneck pace, signaling confidence in its ability to capitalize on the global shift to renewable energy. Let’s dissect why institutional investors are betting big on NXT—and whether it’s a stock to add to your portfolio.

The Institutional Stampede: Hedge Funds Are Building Positions

Institutional investors have been aggressive in acquiring stakes in NXT, particularly in early 2025. Recent SEC filings reveal a stark trend:

1. Commonwealth Equity Services LLC launched a new $2.8 million position in Q1 2025, buying 50,101 shares. This marks their first entry into NXT, a clear vote of confidence in its growth trajectory.
2. Assenagon Asset Management S.A. took a $89.3 million stake, increasing holdings by a staggering 21,759% in Q1 2025. Their total ownership now stands at 1.587 million shares.
3. Norges Bank, Norway’s sovereign wealth fund, acquired a $120.86 million stake in Q4 2024, further underscoring NXT’s appeal to long-term institutional capital.

These moves are no accident. Institutional buying typically reflects deep research into a company’s fundamentals, market position, and scalability. For NXT, the catalysts are clear: industry dominance, surging demand for solar infrastructure, and a financial moat widening by the quarter.

Why NXT’s Financials Are Turning Heads

Nextracker’s financial performance in Q1 2025 paints a compelling picture:
- Revenue hit $720 million, a 50% year-over-year jump, driven by global solar projects and its flagship NEXTracker™ smart solar tracking system.
- Adjusted EBITDA reached $175 million, with a 24.3% margin, reflecting operational efficiency and pricing power.
- The company reaffirmed its FY2025 revenue guidance of $2.8–$2.9 billion, a signal of confidence in its ability to execute amid rising demand.

Analyst Sentiment: A “Moderate Buy” with Upside Potential

Analysts are cautiously bullish, with a consensus “Moderate Buy” rating and a $58.54 average price target—a 25% premium to its current price of $46.63. Key highlights include:
- Guggenheim: Cut its target to $60 but maintained a “Buy” rating, citing NXT’s “strategic acquisitions and leading market share.”
- Wells Fargo: Lowered its price target to $64 but kept an “Overweight” stance, emphasizing NXT’s “position in high-growth solar markets.”
- Barclays: Upgraded its target to $63, calling NXT a “core holding” for renewable energy portfolios.

Technical Analysis: A Stock on the Move

NXT’s stock has been volatile, but key technical indicators suggest it’s primed to rebound:
- The 50-day moving average ($50.54) and 200-day moving average ($51.13) form a support floor.
- Volume trends show increased buying pressure as institutional stakes grow.

The Risks: Not All Sunny Days Ahead

No investment is risk-free. NXT faces challenges like supply chain constraints, regulatory shifts, and competition from rivals like SunPower and Canadian Solar. Additionally, an insider sale—Bruce Ledesma offloaded 12,135 shares in May 2024—could spook short-term traders. However, Ledesma retained 17,387 shares, suggesting he still sees long-term value.

Conclusion: NXT’s Institutional Momentum and Fundamentals Make It a Buy

Nextracker is positioned to thrive in the solar boom, backed by strong fundamentals, institutional confidence, and technological leadership. With a 50% YoY revenue surge, a 24.3% EBITDA margin, and $2.8B in guided revenue, the company is scaling at a pace that justifies its valuation.

The 67.41% institutional ownership and recent multi-million-dollar stakes from firms like Assenagon and Norges Bank highlight a critical point: smart money is already in. For investors seeking exposure to solar infrastructure’s growth, NXT offers a direct play on a sector that’s expected to grow 15% annually through 2030, per IRENA projections.

While volatility is inevitable, NXT’s financial and institutional tailwinds make it a compelling buy for a 12–18 month horizon, with a target price of $58.54 on the table. This isn’t just a solar stock—it’s a stake in the energy transition itself.

Final Verdict: Buy NXT.