About this episode

The episode discusses First Solar as a potentially undervalued semiconductor stock amidst concerns of a value trap due to declining order backlog and uncertain future earnings.

Almost nothing in semiconductor land is cheap right now. First Solar might be the exception — and that is worth paying attention to, even if you have never thought of a solar panel manufacturer as a chip stock. First Solar trades at 12.7x forward earnings and 12.7x forward free cash flow. It carries over $2.4 billion in cash with almost no debt. It just reported record Q1 2026 revenue of just over $1 billion, up 24% year over year, with expanding profit margins. It manufactures domestically in five US facilities — a sixth is under construction in South Carolina. It benefits from Inflation Reduction Act tax credits through 2029. And it has just launched a new manufacturing process called CuRe — copper replacement — that increases panel lifetime energy yield by up to 8% and extends panel lifespan. Everything checks out. Until you look at the guidance and the backlog. Full year 2026 revenue is expected to come in flat to slightly down versus 2025. The order backlog, which peaked above 70 gigawatts in 2023, has now declined to under 48 gigawatts. First Solar is working through existing orders faster than it is winning new ones. A sizable cancellation from customer LightSource BP in…

People in this episode

Hosts: Nicholas Rossolillo, Kasey Rossolillo

Topics covered

• semiconductors
• investing
• value stocks
• solar energy
• financial analysis

Keywords

• First Solar
• semiconductor stock
• value trap
• Inflation Reduction Act
• cancellation
• manufacturing process
• financial guidance
• order backlog
• profit margins

Mentioned in this episode

Organizations: First Solar, LightSource BP, Inflation Reduction Act

Places: South Carolina

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