First Solar Stock Surges in 2025 as Lower Borrowing Costs Spark Optimism

Watch This Crucial Price Point

Highlights

• First Solar's shares surged on Friday, breaking out of a critical chart formation, fueled by optimism following a weak April jobs report that suggests earlier-than-expected interest rate cuts could revive solar sector demand.
• Reduced borrowing costs make solar installations more accessible, potentially expanding the customer base and increasing sales.
• The stock broke out from a pennant pattern but may face resistance near $220, a key horizontal level to watch.

First Solar (FSLR) remains in focus this Monday after its stock broke out from a vital chart pattern last Friday. The breakout was driven by hopes that upcoming interest rate reductions, hinted by a softer-than-expected April employment report, will stimulate demand in the solar industry, which has struggled with low demand and inventory backlogs over the past year.

Lower interest rates reduce financing costs for First Solar and other solar companies, making solar energy installations more affordable for a broader range of consumers. This also facilitates funding for projects requiring substantial upfront investment in technology and infrastructure.

Based in Tempe, Arizona, First Solar eased concerns over domestic demand slowdown by reporting quarterly earnings and revenue that exceeded expectations, with growth of 450% and 45% year-over-year respectively. This signals a potential early recovery for the sector. This contrasts with rival Enphase Energy's (ENPH) recent disappointing results, which highlighted weakening U.S. demand and ongoing inventory challenges in Europe.

Additionally, First Solar is well-positioned to capitalize on the expanding data center market, as major tech firms pursue carbon-neutral energy solutions to power their AI infrastructure. Microsoft (MSFT) recently announced plans to invest over $10 billion in renewable energy capacity to support its data centers, aiming to match all electricity consumption with zero-carbon sources by 2030.

Key Price Level to Monitor After Pennant Breakout

On Friday, First Solar shares broke out from a three-week pennant chart pattern with rising volume, climbing 6.1% to close at $191.55. This breakout signals a continuation of the upward trend that began in mid-March.

The 50-day moving average recently crossed above the 200-day moving average, forming a bullish golden cross, which is a strong buy signal. Investors should monitor the $220 resistance level closely, where selling pressure may intensify, as it aligns with previous swing highs from March to July last year.

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As of this article's publication, the author holds no positions in the securities mentioned.

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