Among the more impressive movers in today’s market is solar technology company First Solar (NASDAQ:FSLR). Shares of FSLR stock are up more than 17% in early afternoon trading, as analysts from both Piper Sandler and UBS raised their price targets on the company.
Piper Sandler believes FSLR stock could be headed for $219 per share (currently trading around $247 per share), and UBS raised their target to $270 (much more bullish). In either case, analysts on both the bullish and bearish ends of the spectrum are clearly realizing something the market is right now. We’re going to need a lot more power for an artificial intelligence (AI) driven future.
This thesis that energy consumption tied to electrification trends and the rise of AI will continue to grow has taken many utility stocks on an incredible ride. But First Solar has been an under-the-radar beneficiary of this trend, with some analyst commentary hinting that many may be missing this picture.
Let’s dive into what to make of First Solar as an AI beneficiary, and if this rally has gone too far.
FSLR Stock Surges as Investors Look to AI for Tailwinds
These price target upgrades from both Piper Sandler and UBS are certainly notable in that these analysts clearly have varying views on the future of the solar power company. Whether you’re bullish or bearish, there’s no denying that the market views this company differently. And the fact that analysts are coming around is certainly bullish for the company, no matter how you view this stock.
I do think the AI-related tailwinds for the utilities and energy generation companies are going to last quite a long time. Additionally, I think it’s intriguing to digest what this will mean for the future of infrastructure spending and where government money will ultimately flow. First Solar should be a key beneficiary of funds from the Inflation Reduction Act, and we’ll see how that all pans out over time. But it’s clear that more attention will need to be paid to the companies providing the power for the key transitions we’re seeing in the economy right now.
Whether you’re skeptical about the electric vehicle (EV) transition or the rise of AI, the numbers don’t lie. We’re using more power than ever to create a technology-driven future. Today, investors are clearly viewing First Solar as a beneficiary of these long-term tailwinds. We’ll have to see how these tailwinds ultimately translate into revenue and earnings growth over time, but for now, it’s party on for investors in FSLR stock.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
