First Solar Stock Plummets 66.28% with 5.74 Billion Shares Traded Amid Tariff Uncertainty

On May 1, 2025, First Solar (FSLR) experienced a significant decline in its stock price, with a trading volume of 5.74 billion, marking a 66.28% decrease from the previous day. This decline was primarily driven by the company's revised guidance for the year 2025, which was impacted by tariff-related uncertainties and policy changes.

During the Q1 2025 earnings call, First Solar's management highlighted the significant challenges posed by shifting trade policies and tariff regimes. The implementation of new tariff initiatives by the administration has introduced substantial uncertainty, particularly affecting the company's operations in Malaysia, Vietnam, and India. The new tariff regime, which includes a 10% universal tariff and potential reciprocal tariffs ranging from 26% to 46%, has created economic headwinds for First Solar's manufacturing facilities in these countries.

First Solar's management indicated that the company is prepared to idle capacity if reciprocal tariffs are implemented without cost-sharing from customers. This decision is aimed at mitigating the adverse gross margin impact from changes in law due to the implementation of tariffs on modules. The company's contracted backlog, which stood at 66.3 gigawatts as of March 31, 2025, includes provisions that allow for the termination of contracts if tariff-related risks become significant.

Despite these near-term challenges, First Solar remains optimistic about the long-term prospects for solar demand, particularly in the U.S. market. The company's unique profile, including its status as the only U.S.-headquartered PV manufacturer of scale and its fully vertically integrated U.S. solar manufacturing presence, positions it well to serve this demand. First Solar's proprietary Cad-Tel-based semiconductor technology and its significant network of domestic supply chain vendors further enhance its competitive advantages.

First Solar's management also emphasized the importance of continued enforcement and strengthening of U.S. trade laws to address unfair and illegal trading practices by Chinese companies. The company is actively engaging with political leaders and policy makers to advocate for supportive industrial policies that allow high-value solar manufacturing to grow and thrive in the United States.

In response to the tariff-related uncertainties, First Solar has updated its guidance for the year 2025. The company's net sales guidance is between 4.5 billion and 5.5 billion, with an operating margin of approximately 35%. The earnings per diluted share guidance range is $12.50 to $17.50, reflecting the direct and indirect impacts of the new tariff regime on the company's operations and financial performance.