First Solar Shares Plummet 10% on Jefferies Downgrade, $1.5B Trading Volume Ranks 58th in Market Activity

Market Snapshot

, 2026, marking one of the day’s most volatile performances. , , ranking the stock 58th in terms of activity across the market. Despite the sharp decline, the stock remains above its 52-week low, . The elevated volume and price drop signal heightened investor concern, with the stock’s decline attributed to a critical downgrade from Jefferies and broader uncertainty about future demand and strategic execution.

Key Drivers

Jefferies’ downgrade of First Solar from “Buy” to “Hold,” accompanied by a reduced price target of $260 (from $269), catalyzed the stock’s steep decline. The firm cited “limited visibility into 2026 bookings” and emerging questions about the company’s long-term strategic direction as primary concerns. Analyst Julien Dumoulin-Smith highlighted that expectations for policy-driven upside, particularly from , may not materialize as anticipated. Potential carve-outs for Germany and other trading partners could dilute pricing benefits, while developers are accelerating procurement decisions ahead of looming tariffs and foreign entity of concern () restrictions. These dynamics limit First Solar’s ability to capture pricing uplift, raising downside risks to projected 2026 volumes.

The downgrade followed a challenging 2025 for First Solar, during which the company repeatedly cut guidance, , and experienced margin compression. While the stock rallied to 52-week highs in late 2025 amid easing regulatory concerns, the firm argues that “incremental policy support is insufficient to justify current valuations.” Jefferies also noted that First Solar’s free cash flow generation, though positive, is likely too elongated to serve as a near-term catalyst. The firm emphasized that investor focus is shifting from regulatory tailwinds to execution risks and cash deployment, with limited upside potential from current levels.

Financial metrics, while robust in the short term, highlight underlying vulnerabilities. , , underscoring its efficiency in cost management. However, , indicating conservative leverage but also limited flexibility in navigating margin pressures. .

Valuation concerns persist despite First Solar’s market leadership in thin-film solar technology and production capabilities across Vietnam, Malaysia, the U.S., and India. , a peak multiple that Jefferies argues does not justify the risks. Analysts note that while the company plans to relocate 3.7 gigawatts of Southeast Asian capacity to the U.S., non-cash underutilization charges and reciprocal tariffs in India could disrupt volumes. Meanwhile, 36 of the past 39 Wall Street analysts rate the stock as “Buy” or “Overweight,” contrasting with Jefferies’ caution. The firm’s downgrade reflects a broader shift in market sentiment, as investors increasingly prioritize execution risks and cash flow management over speculative regulatory benefits.

Strategic and Regulatory Outlook

Jefferies’ analysis underscores the fragility of First Solar’s long-term strategy amid evolving trade policies and global supply chain shifts. The firm questions the sustainability of international facilities under existing tariffs and highlights the company’s reliance on domestic manufacturing expansion, such as its Louisiana plant and planned U.S. finishing lines. While these moves aim to reduce exposure to foreign trade barriers, they also introduce execution risks and capital deployment challenges. , but emphasizes that deployment opportunities in 2026 will likely focus on completing production lines rather than aggressive buybacks.

In summary, the stock’s 10.29% drop reflects a confluence of factors: reduced booking visibility, policy-related uncertainties, margin pressures, and valuation skepticism. While First Solar remains a leader in thin-film solar technology, the market’s reaction underscores the need for clearer strategic execution and improved booking confidence to restore investor confidence. The coming months will likely test the company’s ability to navigate regulatory headwinds and deliver on its financial commitments, with Jefferies’ revised rating serving as a cautionary signal for short-term investors.