First Solar Reports This Week With a 54-Gigawatt Backlog, and the AI Power Crunch May Be the Catalyst That Finally Makes Solar Stocks Unstoppable

First Solar, the largest American manufacturer of solar panels by market capitalization, reports its fourth-quarter and full-year 2025 results this week, and the numbers landing on Wall Street's desks will carry significance that extends well beyond a single company's performance. In a year when the artificial intelligence revolution has driven electricity demand to levels that the existing power grid cannot meet, solar energy has quietly emerged as one of the most compelling investment themes in the market, and First Solar sits at the center of it.

The Numbers Wall Street Is Watching

Analysts expect First Solar to report earnings per share of approximately $23.30 for fiscal 2025, which would represent a 59.5% increase over the prior year. Revenue is projected to reach roughly $6.16 billion, a 15% year-over-year gain that reflects both higher panel shipment volumes and improving average selling prices.

But the headline numbers are only part of the story. The metric that matters most for First Solar's long-term trajectory is its backlog. As of early 2026, the company had 54.5 gigawatts of total bookings, a contracted pipeline of future deliveries that stretches years into the future and provides an unusual degree of revenue visibility for a manufacturing company. That backlog is the product of years of disciplined capacity building and a technology portfolio, specifically its cadmium telluride thin-film panels, that offers performance advantages in the high-heat, high-humidity conditions where much of the new utility-scale solar capacity is being deployed.

The AI Power Catalyst

What has changed the calculus for solar stocks in 2026 is not a breakthrough in panel technology or a new government subsidy. It is the staggering electricity requirements of artificial intelligence. AI data centers consume power at a density that dwarfs traditional computing facilities. A single rack of Nvidia's latest Blackwell GPUs can draw more electricity than 100 average American homes. Multiply that by the thousands of racks being deployed across hundreds of new data centers, and the aggregate demand is rewriting the assumptions that underpinned every energy forecast published before 2024.

The numbers are extraordinary. The International Energy Agency estimates that global data center electricity consumption could double by 2028, rising from roughly 460 terawatt-hours in 2024 to more than 900 terawatt-hours. In the United States alone, utilities are scrambling to add tens of gigawatts of new generation capacity to meet demand that is growing faster than at any point since the postwar industrial boom.

Solar energy is uniquely positioned to capture a disproportionate share of that demand growth. Unlike natural gas plants, which require lengthy permitting processes and are subject to volatile fuel costs, solar installations can be built relatively quickly, operate with zero fuel costs once deployed, and benefit from a levelized cost of energy that has fallen below every other generation technology in most U.S. markets.

Goldman Sachs Makes the Bull Case

Goldman Sachs highlighted a group of U.S.-focused solar and storage stocks as its top ideas for 2026, arguing that steadier utility-scale growth, rising data center power demand, and a cleaner policy backdrop should support both earnings and valuations. The bank reiterated its Buy rating on First Solar and said it sees approximately 28% upside for its Buy-rated solar names, with a median upside of about 15% across its broader solar coverage.

The Goldman thesis rests on three pillars. First, utility-scale solar deployment is entering a phase of more predictable growth as interconnection queue backlogs clear and grid operators streamline the approval process for new projects. Second, the AI-driven surge in power demand is creating a new class of buyer, the hyperscale data center operator, whose willingness to sign long-term power purchase agreements at premium prices is improving project economics for solar developers. Third, the policy environment has stabilized, with the Inflation Reduction Act's tax credits providing a durable incentive structure that reduces investment risk.

The Domestic Manufacturing Advantage

First Solar enjoys a competitive advantage that is becoming increasingly valuable in the current trade environment. As the only major solar panel manufacturer with a significant U.S. manufacturing footprint, the company is largely insulated from the tariffs that are raising costs for competitors who import panels from Southeast Asia and China.

The Section 122 tariffs that took effect this weekend add another layer of protection. While the 15% duty applies to imported solar panels and components, First Solar's domestic production is exempt. That means the price gap between First Solar's panels and imported alternatives is widening, which could accelerate the company's market share gains in the U.S. utility-scale segment.

First Solar has been investing aggressively to expand its domestic capacity. The company announced a $300 million investment in a new manufacturing facility that is expected to begin commercial operations in the second half of 2026. Once operational, the facility will add several gigawatts of annual production capacity, helping the company work through its backlog while positioning for the demand growth that Goldman Sachs and others are forecasting.

Risks to the Thesis

No investment thesis is without risks, and solar stocks carry their share. The most immediate concern is political. While the Inflation Reduction Act's tax credits enjoy broad support in Congress, any future legislative changes that reduce or eliminate those incentives could significantly impact project economics and demand. The midterm elections in November add an element of uncertainty, though most analysts believe the credits are durable given the jobs and investment they have created in Republican-held districts.

Interest rates are another variable. Solar projects are capital-intensive, and higher borrowing costs reduce the return on investment for developers. If the Federal Reserve is forced to raise rates in response to tariff-driven inflation, the financing environment for solar projects could tighten.

Supply chain constraints, particularly for inverters, transformers, and grid interconnection equipment, remain a bottleneck that limits how quickly the industry can convert demand into installed capacity. Even if panel supply is abundant, the inability to connect projects to the grid on schedule can delay revenue recognition and push out project timelines.

What the Earnings Mean for the Sector

First Solar's results this week will serve as a barometer for the entire solar industry. If the company beats estimates, raises guidance, and reports continued strength in its backlog, it will validate the thesis that AI-driven power demand is creating a structural tailwind for solar stocks. If the results disappoint, it could raise questions about whether the sector's recent rally has gotten ahead of the fundamentals.

The setup is favorable. A 54.5-gigawatt backlog provides years of revenue visibility. Domestic manufacturing insulates the company from tariff risk. And the intersection of AI power demand and clean energy investment is creating a market opportunity that did not exist even two years ago.

For investors who have been waiting for a catalyst to pull them into the solar trade, the convergence of strong fundamentals, supportive policy, and structural demand growth may be as compelling as it gets. First Solar's earnings call will tell us whether the market agrees.