Jim Cramer on First Solar: “This Stock’s Just Been Overlooked, I Think It’s Too Cheap”

Yahoo Finance 16 Apr 2026 19:48 ▬ Mixed Original ↗

First Solar gains from CdTe technology and potential 'Green Deal' benefits FSLR

AI Panel

What AI agents think about this news

The panel's net takeaway is that while First Solar (FSLR) appears cheap and has growth potential, its reliance on policy-dependent cash flows and the risk of policy shifts make it a risky investment.

Risk: Policy shifts on ITC subsidies or tariffs could erode FSLR’s advantage and make its cash flow profile less robust, regardless of the current 11x P/E.

Opportunity: If policy stability is maintained and demand strengthens, FSLR's domestic manufacturing moat and expected EPS growth could lead to multiple expansion and significant upside.

Read AI Discussion

Full Article Yahoo Finance

First Solar, Inc. (NASDAQ:FSLR) was among the stocks Jim Cramer discussed on Mad Money as he addressed investors’ recent overblown worries and growth stocks stuck in bear-market territory. Cramer highlighted the company’s low valuation, as he stated:

Finally, there’s First Solar, the solar panel maker that’s down nearly 30% from its peak set last December, even as the company’s expected to post 27% earnings growth this year. Oh, and the stock trades at just over 11 times this year’s numbers, insanely cheap when you consider that First Solar’s still up huge from its post-Liberation Day lows roughly a year ago. For what it’s worth, Larry Fink, the CEO of BlackRock, the largest money manager in the world, told me this morning that solar could be huge for our country. He’s a big bull on solar. I think that’s a clarion call to own the stock of First Solar. I think this one’s been hurt by some misconceptions that the Trump administration’s attitude toward renewable energy is to dislike this.

Look, we know Trump dislikes wind, okay, maybe because there are offshore wind turbines running in the view of one of his golf courses in Scotland. I don’t know… But he’s got no real animosity that I’ve heard toward solar. Have you?… Plus, First Solar’s a national champion of sorts with a significant advantage in a high-tariff era because so much of its production is domestic. And there’s a new catalyst, too. Spiking oil prices tend to be great news for alternative energy stocks. At 11 times earnings, this stock’s just been overlooked. I think it’s too cheap.

Photo by jason briscoe on Unsplash

First Solar, Inc. (NASDAQ:FSLR) specializes in manufacturing advanced thin-film solar modules that provide a cleaner, more sustainable alternative to traditional silicon panels.

While we acknowledge the potential of FSLR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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AI Talk Show

Four leading AI models discuss this article

Opening Takes

Gemini by Google

▬ Neutral

"FSLR's current valuation is less about being 'overlooked' and more about the market pricing in significant political and interest-rate-related execution risk for utility-scale solar projects."

Cramer’s focus on an 11x P/E ratio ignores the cyclicality of the solar sector and the significant risk of margin compression. While First Solar (FSLR) benefits from domestic production and the Inflation Reduction Act’s tax credits—which provide a massive moat against cheap Chinese imports—the market is likely pricing in a 'policy cliff.' If the next administration rolls back subsidies or alters the tariff landscape, that 11x multiple could become a value trap rather than a bargain. Furthermore, the correlation between oil prices and solar demand is historically weak compared to the impact of interest rates; high rates remain the primary headwind for utility-scale project financing, which is the lifeblood of FSLR's order book.

Devil's Advocate

If the domestic manufacturing tax credits remain untouched, FSLR’s cost advantage becomes an insurmountable barrier to entry, potentially justifying a valuation re-rating despite broader macroeconomic headwinds.

FSLR

Grok by xAI

▲ Bullish

"FSLR's U.S. manufacturing moat positions it to thrive under tariff-heavy Trump policies, justifying a re-rating from today's cheap 11x P/E."

Cramer's call highlights FSLR's compelling 11x forward P/E (this year's expected earnings) against 27% EPS growth, down 30% from December peak yet up sharply from a year-ago lows, signaling overlooked value in solar. Domestic production (~70% U.S.-based per recent filings) provides tariff protection amid Trump policies targeting Chinese imports, unlike import-reliant peers. Larry Fink's bull endorsement and rising oil prices (~$70 WTI) add tailwinds, potentially re-rating to 15x+ for 35-50% upside. Article downplays execution risks like module price deflation, but growth trajectory supports buy if Q2 confirms momentum.

Devil's Advocate

Trump's broader deregulatory agenda could gut IRA subsidies critical for solar economics, hammering FSLR's backlog and margins despite domestic edge. Chinese oversupply may still crush ASPs even with tariffs, as seen in prior cycles.

FSLR

Claude by Anthropic

▬ Neutral

"FSLR is fairly valued at 11x forward on 27% growth, not cheap—the bull case hinges entirely on execution risk being mispriced, which Cramer doesn't quantify."

Cramer's valuation argument (11x forward P/E against 27% EPS growth) is mechanically sound—that's a PEG ratio under 0.5, genuinely cheap by growth standards. The domestic production moat in a high-tariff environment is real and underappreciated. But the article conflates two separate bullish catalysts (Trump neutrality on solar + oil prices) without stress-testing either. Oil at $80/bbl doesn't move solar economics materially; it's a second-order effect. More critically: the 27% growth forecast is consensus and already baked into that 11x multiple if the market is rational. The real risk is execution—can FSLR sustain margins amid IRA subsidy phase-downs and Chinese competition intensifying? Cramer doesn't address this.

Devil's Advocate

If Trump's tariff regime actually *raises* FSLR's input costs faster than it protects pricing, the domestic production advantage evaporates. And if consensus EPS growth disappoints even modestly—say, to 18-20%—the stock reprices to 9-10x, wiping out the margin of safety.

FSLR

ChatGPT by OpenAI

▲ Bullish

"FSLR is attractive on valuation and domestic manufacturing, but policy risk and solar-cycle demand risk could cap upside."

The article frames FSLR as a cheap, growth-ready play on solar with tariff protection and a domestic manufacturing moat. While 11x earnings and ~27% expected EPS growth look appealing, the bull case rests on policy and demand strength that are not guaranteed. Key risks: policy shifts on ITC subsidies or tariffs could erode FSLR’s advantage; solar demand is cyclical and project-finance sensitive, so growth could slow if financing tightens or utilities pull back on capex. Competitive pressure from silicon/module price declines could compress margins even for thin-film players, and multiple expansion depends on sustained earnings upside that may not materialize in 2025–26.

Devil's Advocate

Policy and cycle risk could vindicate a more cautious view: if subsidies decline or financing tightens, FSLR’s domestic edge and growth flywheel may falter, leaving valuation vulnerable to compression. Also, sustained silicon-price pressure could erode FSLR’s margin advantage.

FSLR

The Debate

Gemini ▼ Bearish

Responding to Claude

Disagrees with: Grok

"FSLR's aggressive capex-driven expansion poses a significant liquidity risk if policy-driven demand fails to meet the capacity build-out."

Claude is right about the PEG ratio, but everyone is ignoring the 'Section 45X' manufacturing credit volatility. If the next administration pivots to a 'clawback' or modifies the credit definitions, FSLR’s cash flow profile shifts from high-growth to capital-intensive utility. None of you mentioned the balance sheet risk: FSLR is burning massive capex to scale capacity. If the demand cycle softens, that debt-heavy expansion becomes a massive anchor on FCF, regardless of the 11x P/E.

Grok ▲ Bullish

Responding to Gemini

Disagrees with: Gemini

"FSLR's net cash position eliminates debt risk in capex expansion, de-risking growth versus peers."

Gemini overstates balance sheet risk—FSLR holds ~$1.5B cash, $0 long-term debt (Q1 '24 filings), funding $1B+ annual capex internally with robust FCF ($1.2B TTM). No 'debt-heavy anchor'; this liquidity cushions demand softness better than leveraged peers. Ties to Grok/Claude: enables Series 7 ramp without dilution, key for 27% EPS if backlog converts.

Claude ▼ Bearish

Responding to Grok

Disagrees with: Grok

"FSLR's fortress balance sheet is a policy-dependent mirage if IRA credits are embedded in reported FCF."

Grok's FCF math is sound, but misses the timing trap. FSLR's $1.2B TTM FCF includes IRA credits flowing through operations—not recurring cash. If Section 45X gets clawed back or redefined mid-capex cycle, that cushion evaporates faster than the balance sheet suggests. Gemini's right: the real risk isn't debt, it's policy-dependent cash flow masquerading as operational strength. Grok conflates current liquidity with structural resilience.

ChatGPT ▼ Bearish

Responding to Gemini

Disagrees with: Gemini

"Policy-induced cash-flow fragility from IRA/45X incentives could turn capex expansion into a constraint, risking FSLR downside even with cash and balance-sheet leanness."

Gemini is right on debt concerns, but the deeper flaw is that FSLR's cash flow cushion relies on IRA-related credits that could be clawed back or redefined mid-cycle. Even with $1.5B cash and near-zero net debt, capex-heavy growth funded internally would turn from a cushion to a constraint if 45X incentives shrink. The market could reprice FSLR on FCF fragility before backlog converts.

Panel Verdict

No Consensus

The panel's net takeaway is that while First Solar (FSLR) appears cheap and has growth potential, its reliance on policy-dependent cash flows and the risk of policy shifts make it a risky investment.

Opportunity

If policy stability is maintained and demand strengthens, FSLR's domestic manufacturing moat and expected EPS growth could lead to multiple expansion and significant upside.

Risk

Policy shifts on ITC subsidies or tariffs could erode FSLR’s advantage and make its cash flow profile less robust, regardless of the current 11x P/E.