Why Investors Are Betting Big on FSLR's Manufacturing Boom

First Solar (FSLR) is making waves in the clean energy space with an aggressive expansion plan that’s reshaping the solar industry’s competitive landscape. The company’s capital allocation strategy isn’t just about growing—it’s about dominance.

The Numbers Tell a Compelling Story

The market has taken notice. FSLR stock has surged 9.2% over the past month, outpacing its broader industry’s 4.9% growth. More importantly, Wall Street consensus paints an even rosier picture: analysts expect earnings per share to jump 21.63% in 2025, followed by a robust 58.36% increase in 2026. These projections suggest the market is pricing in substantial operational leverage from the company’s current initiatives.

Perhaps most intriguing? FSLR trades at 11.45X forward earnings—a meaningful discount compared to the sector’s 18.29X multiple. For value-conscious investors, this gap between valuation and growth trajectory warrants attention.

Manufacturing Muscle: The Real Story

Behind these metrics lies a concrete capex strategy. First Solar plans to deploy between $0.9 billion and $1.2 billion during 2025 for capital improvements. This capital deployment covers new facility construction, advanced machinery upgrades, R&D intensification, and throughput enhancements across its production footprint.

The payoff? First Solar aims to deliver 16.7 to 17.4 GW of solar module output by year-end 2025—a significant increase that directly addresses surging demand from major industrial end-users. The catalyst driving this growth extends beyond standard utility-scale projects. Artificial intelligence infrastructure buildouts have emerged as a critical demand driver, with hyperscale data center operators increasingly sourcing power from large solar installations featuring high-efficiency modules.

Next-Generation Products: CuRe and Perovskite

First Solar isn’t merely ramping existing capacity—it’s preparing for the next technology cycle. The company is launching its upgraded CuRe solar modules in early 2026, delivering enhanced output metrics. Simultaneously, FSLR is channeling substantial resources into perovskite thin-film research and development, a frontier technology promising superior efficiency and lower manufacturing costs compared to current-generation alternatives.

This dual-track approach—maximizing near-term capacity while investing in breakthrough technologies—positions the company to sustain competitive advantages as global solar demand continues its upward trajectory.

How FSLR Stacks Against Peers

SolarEdge Technologies (SEDG) has pursued a complementary investment thesis, emphasizing R&D to enhance product performance and capture emerging markets like data center power solutions. Sunrun (RUN) took a different path, leveraging capital investments to cement its position as America’s largest residential solar provider and third-party system owner, while rolling out innovations such as its “Flex” offering to improve unit economics.

FSLR’s strategy occupies distinct middle ground: manufacturing-centric with technology optionality, versus SEDG’s software-hardware hybrid approach or RUN’s customer-acquisition focus.

The Investment Case

First Solar currently carries a Zacks Rank of #3 (Hold), reflecting analyst caution amid broader market uncertainty. Yet the combination of accelerating earnings growth, favorable valuation relative to peers, and a multi-year capex cycle targeting capacity and innovation creates an asymmetric risk-reward profile worth monitoring.

The company’s ability to convert $0.9-1.2 billion in annual capital deployment into market share gains—particularly as AI-driven power demand reshapes utility procurement patterns—will be the key metric to watch through 2025-2026.