First Solar Shares Drop 3.82% as $970M Volume Plunges to 81st in Market Activity

On August 19, 2025, First Solar (FSLR) closed with a 3.82% decline, trading with a daily volume of $0.97 billion, a 52.77% drop from the prior day, ranking 81st in market activity. The stock’s performance was shaped by a mix of regulatory shifts, earnings momentum, and sector-specific dynamics.

Recent U.S. Treasury Department guidance on solar tax credits introduced clarity, easing investor concerns over policy restrictions. The updated rules require projects to initiate physical construction by July 5, 2026, to qualify for incentives, replacing earlier thresholds. While this phase-out timeline applies to projects after 2027, the clarity boosted sector sentiment, with First Solar benefiting alongside peers. The company emphasized its strategic positioning amid evolving trade policies, including Trump-era tariffs, which it expects to stabilize pricing and demand.

First Solar’s Q2 earnings report underscored its resilience, with revenue rising 8.6% year-on-year to $1.1 billion and GAAP earnings exceeding estimates by 19.6%. The firm raised 2025 revenue guidance to $5.3 billion, reflecting stronger-than-expected demand. Management highlighted optimism about navigating a challenging policy environment, despite broader solar industry headwinds such as high interest rates and soft demand.

Analysts noted a favorable shift in risk-reward profiles for First Solar. Mizuho upgraded its price target to $278, citing policy advantages, while a recent partnership with UbiQD to integrate quantum dot technology into solar modules signaled innovation-driven growth potential. However, the stock’s recent pullback followed a sharp 9.7% rally earlier in the week, driven by tax credit optimism and ETF inflows into clean energy funds.

The strategy of buying the top 500 stocks by daily trading volume and holding them for one day from 2022 to 2025 yielded a 1-day return of 1.98%, with a total return of 7.61% over 365 days. The approach had a Sharpe ratio of 0.94, indicating reasonable risk-adjusted returns, though it faced a maximum drawdown of -29.16% during downturns.