2 Solar Stocks Heating Up for a Major Industry Rebound

Key Points

• Trump’s “Drill, baby, drill” policy hasn’t hurt the solar industry stocks as of yet.
• Solar trackers can improve the efficiency of solar panels by generating 20% to 30% more power than traditional fixed-tilt systems.
• The top two solar tracker manufacturers are committed to manufacturing their trackers in the United States, making them tariff-proof.

With the Trump administration back in the White House, investors would believe that renewable energy would be a losing game under the “Drill, baby, drill” policies. Trump’s efforts to revoke Biden-era policies like the electric vehicle (EV) mandate assume the clean energy theme is doomed on Wall Street. On the contrary, solar stocks started the year with solid gains, even outscoring the computer and technology sector leaders. Some winners are not solar panels but devices that make them more efficient. Here are two solar stocks heating up for an industry rebound.

Nextracker: Intelligent Solar Trackers To Make Solar Panels More Efficient   

A weakness of solar panels (photovoltaic panels) angled in one stationary position in fixed-tilt systems is their inefficiency when the sun moves throughout the day.

To help optimize energy production, Nextracker Inc. NASDAQ: NXT designs and manufactures utility-scale intelligent solar trackers that follow the sun throughout the day to increase the energy capture of solar panels by 20% to 30%.

They are the global market leader in intelligent solar trackers augmented with their machine learning-optimized TrueCapture tracking software.

Solid Beat and Raise as Backlog Swells to a Record $4.5 Billion

On Jan 28, 2025, Nextracker reported fiscal Q3 2025 EPS of $1.03, crushing consensus analyst estimates by 45 cents. Revenues fell 4.4% YoY to $679 million, beating $646.02 million consensus estimates. The company increased its record backlog to $4.5 billion, driven by robust demand in all key regions with meaningful contributions from new products. Nextracker expanded its manufacturing and supply chain to over 70 partners operating over 90 facilities across 19 countries, totaling 50 GW of capacity annually. The company also shipped its first 100% U.S. domestically produced solar trackers.

Sunny Days Ahead as Company Raises Guidance for Fiscal 2025

Nextracker raised their fiscal full-year EPS to $3.75 to $3.95, up from the previous guide of $3.10 to $3.30, versus $3.27 consensus estimates. The company issued upside fiscal full year 2025 revenue of $2.8 billion to $2.9 billion versus $2.85 billion.

GAAP net income was raised from $467 million to $497 million, up from the previous forecast of $376 million to $408 million.

Adjusted EBITDA was raised to $700 million to $740 million from $625 million to $665 million.

Nextracker CEO Dan Shugar commented, "In the quarter, we successfully deployed several of our newly launched products and features at scale, expanding our total addressable market. In addition, we continue to increase our investment in R&D to drive rapid customer-centric innovation, ensuring our solutions remain at the forefront of solar technology while driving value for stakeholders worldwide."

Array: An Underdog Bet for Solar Tracking Speculators   

While Nextracker is the dominant leader and gold standard in solar trackers, Array Technologies Inc. NASDAQ: ARRY stands as a strong runner-up.

The company's sales are a third of Nextracker's, but if Nextracker is any indication of the industry, then Array could also partake in the upswing.

While Nextracker arrays use independent rows with a balanced mechanical design, Array’s DuraTrack is designed with a single-axis tracker with a centralized drive system, which can be more cost-effective for flatter terrains.

The Other Side of the Coin

On Nov 7, 2024, Array Technologies reported its fiscal Q3 2025 EPS of 17 cents, beating consensus estimates by 4 cents.

Revenue fell a whopping 34% YoY to $231.41 million, missing consensus estimates of $232.69 million.

Its backlog was at $2 billion, with 20% of the orders for OmniTrack. 

Interconnection and permitting delays are some of the headwinds in the United States, but the financing environment is improving in 2025.

Array Technologies issued downside guidance for fiscal 2025 EPS of 60 cents to 65 cents versus 68 cents consensus estimates.

Revenues are expected between $900 million to $920 million versus $945.06 million.

Tariff-Proofed Solar Trackers Made in America

Array Technologies CEO Kevin Hostetler reiterated their commitment to production in the United States, “Additionally, a significant portion of orders in our domestic order book includes customers evaluating domestic content, and we remain confident in our ability to provide 100% domestic trackers. Our high-probability pipeline remains robust, and we are greatly encouraged by the overall momentum in the business,” This makes their solar trackers basically tariff-proof under the Trump tariffs.