First Solar’s full-year revenue came below Wall Street expectations and a quarterly profit miss has raised investor concerns regarding cost pressure due to tariffs.
- Tariff-related costs compressed gross margins and clouded the company’s 2026 outlook.
- CFO Alex Bradley said that, due to rising tariff costs, products made in India are likely to be sold domestically rather than shipped to other markets.
- CEO Mark Widmar said that headwinds beyond reciprocal tariffs and commodity cost increases continue to build for the crystalline silicon industry.
First Solar stock fell over 15% in premarket trading on Wednesday, as the company’s profit remains under pressure from high tariff-related costs that have dented its growth and led to a fourth-quarter profit miss.
The company’s stock is set to snap a three-day gaining streak if momentum holds into trading hours. Shares of First Solar have declined nearly 7% so far this year majorly due to concerns regarding the impact on First Solar from Tesla’s plans to scale solar given its cost advantage and pricing power.
First Solar’s Tariff Impact
CFO Alex Bradley said that for the full-year 2025, gross margin was 41%, a decrease from 44% in the prior year. “The decline was primarily driven by tariff costs, as well as the impact of tariffs exacerbating warehousing expense associated with a back-weighted revenue profile, detention and demurrage,” Bradley.
He noted that this was partially driven by supply-demand imbalances following certain contract terminations due to customer default, and underutilization from the curtailment of the company’s Series 6 international facilities.
CEO Mark Widmar said that headwinds beyond reciprocal tariffs and commodity cost increases continue to build for the crystalline silicon industry. He added that a combination of tighter trade enforcement, potential retroactive tariffs, and greater intellectual property enforcement is increasing cost, timing, and compliance risks for developers relying on crystalline silicon products with ties to China.
Bradley said that due to the tariff uncertainty, Indian productions are assumed to be sold into the Indian domestic market. “We'll continue to monitor opportunities to export products into the U.S., where it is margin accretive to do so,” he said.
The company said that tariffs also indirectly lead to underlying commodity cost pressure on its variable U.S. bill of materials, including aluminum, steel, glass, interlayer targets, and spares.
What Is Retail Thinking?
Retail sentiment on First Solar jumped to ‘extremely bullish’ from ‘bullish’ a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
A user on Stocktwits said that they were disappointed in the company’s 2026 guidance.
A bullish user on Stocktwits said that once Trump is gone, the stock is likely to soar and added that “hang in there.”
Shares of First Solar jumped more than 55% in the last 12 months.
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