What Happened?
A number of stocks fell in the morning session after President Donald Trump announced his administration would not approve new solar or wind power projects, causing a sell-off in the renewable energy sector. The move came after President Donald Trump posted on his social media platform, Truth Social, that "We will not approve wind or farmer destroying Solar," adding, "The days of stupidity are over in the USA!!!" This statement escalated his campaign against renewable energy development. The remarks prompted a sector-wide sell-off, pressuring solar and wind stocks broadly. Other renewable energy companies also saw their shares plummet following the announcement, reflecting investor concern over the future of green energy projects under his administration.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Renewable Energy company Blink Charging (NASDAQ: BLNK) fell 3.3%. Is now the time to buy Blink Charging? Access our full analysis report here, it’s free.
- Renewable Energy company FuelCell Energy (NASDAQ: FCEL) fell 3.3%. Is now the time to buy FuelCell Energy? Access our full analysis report here, it’s free.
- Renewable Energy company First Solar (NASDAQ: FSLR) fell 6.7%. Is now the time to buy First Solar? Access our full analysis report here, it’s free.
- Renewable Energy company Nextracker (NASDAQ: NXT) fell 3.4%. Is now the time to buy Nextracker? Access our full analysis report here, it’s free.
- Renewable Energy company EVgo (NASDAQ: EVGO) fell 3.7%. Is now the time to buy EVgo? Access our full analysis report here, it’s free.
Zooming In On First Solar (FSLR)
First Solar’s shares are extremely volatile and have had 36 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock dropped 4.9% on the news that investors took some profits off the table as markets awaited signals on future monetary policy from the Federal Reserve's Jackson Hole symposium later in the week.
The downturn in the market was largely attributed to a significant sell-off in megacap tech and chipmaker shares. Nvidia, Advanced Micro Devices (AMD), and Broadcom all saw notable drops, dragging down the VanEck Semiconductor ETF. Other major tech-related companies like Tesla, Meta Platforms, and Netflix were also under pressure. A key reason for this trend is that much of the recent market gains have been concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
First Solar is up 3.1% since the beginning of the year, but at $192.18 per share, it is still trading 24.9% below its 52-week high of $255.75 from September 2024. Investors who bought $1,000 worth of First Solar’s shares 5 years ago would now be looking at an investment worth $2,594.
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