Solar stocks quietly delivered an impressive comeback in 2025. The widely followed Invesco Solar ETF (NYSEARCA: TAN) surged 48% for the year, comfortably outperforming the S&P 500. That strength caught many investors off guard, particularly given the policy uncertainty that surrounded the sector earlier in the year. Concerns that the Trump administration might aggressively roll back renewable energy tax credits weighed heavily on sentiment during the first half of 2025.
Those fears ultimately proved overdone. While the One Big Beautiful Bill did phase out certain subsidies, the scope and timeline of the changes were far more measured than initially expected. As clarity improved, capital flowed back into the space, and several leading solar names posted triple-digit gains. Heading into the new year, the sector is consolidating from a position of strength rather than breaking down.
If that momentum carries into 2026, two of last year’s sector leaders are worth keeping firmly on the radar.
NextPower: Momentum-Driven Growth in Solar Infrastructure
NextPower (NASDAQ: NXT) emerged as one of the most explosive performers in the solar space in 2025. The company specializes in advanced solar tracking systems, designing and manufacturing single-axis trackers that allow panels to follow the sun’s movement throughout the day. These systems are increasingly critical for utility-scale projects focused on maximizing efficiency and output.
Shares of NXT surged 138% in 2025, placing it among the top performers in the entire renewable energy sector. And that performance forced analysts to rethink their targets. One year ago, the consensus price target sat near $53. Today, that figure has climbed to $95.76, implying almost 10% additional upside potential from current levels. In total, based on 27 analyst ratings, the stock holds a consensus Moderate Buy rating.
It wasn’t just the analysts who took notice, with Institutional investors also leaning in. Over the past twelve months, NextPower has seen total institutional inflows of $2.27 billion, compared with $957 million in outflows. That accumulation reflects confidence not only in the stock’s momentum but also in its fundamentals.
In its most recent earnings report, NextPower posted second-quarter fiscal 2026 earnings on Oct. 23, reporting earnings per share of $1.19, beating consensus estimates by 21 cents. Revenue came in at $905.27 million, also well ahead of expectations.
From a technical standpoint, the stock is at an interesting inflection point. Momentum remains positive, but a clear battle has formed between buyers and sellers. Support near $84 has become critical. Holding that level keeps the door open for a breakout above $90. A sustained move above that threshold could trigger a fresh leg higher within the stock’s broader uptrend. Conversely, a decisive break below $84 would likely cool momentum in the near term.
First Solar: Utility-Scale Leader With Valuation Support
First Solar (NASDAQ: FSLR) remains one of the most established and differentiated players in the solar industry. The company designs and manufactures thin-film photovoltaic modules using cadmium telluride technology, supplying both modules and integrated solar power solutions primarily for utility-scale projects. That focus gives First Solar a distinct positioning compared with competitors, more exposed to residential or highly commoditized markets.
From a return-to-shareholders' perspective, 2025 was a strong year. Shares finished the year up 48%, comfortably outperforming the broader market. What stands out, however, is that valuation has remained reasonable despite that performance. The stock currently trades at a forward P/E of 11.5, and analyst sentiment remains bullish.
First Solar carries a consensus Moderate Buy rating based on 35 analyst ratings, with a consensus price target implying modest upside of almost 4%. Fundamentally, the company has continued to execute, beating revenue expectations in each of the last two quarters as demand for large-scale solar projects remained resilient.
Technically, the setup is also encouraging. Shares have been holding a well-defined upward trend, with the $250 area acting as a critical support level. If the stock can continue to build a base between roughly $260 and $280, a sustained move above $280 could open the door to renewed momentum and sector leadership as we move into 2026.
Solar Momentum Faces Its Next Test
As 2026 takes off, solar stocks are entering the year with improving sentiment, clearer policy visibility, and technically constructive setups. First Solar and NextPower stand out as two companies positioned at the intersection of fundamentals, analyst conviction, and sector momentum.
That said, for upside momentum to continue and higher trends to remain intact, the key support levels that formed during recent consolidations will need to hold. If they do, both stocks remain well-positioned to participate in any renewed strength across the solar space in the year ahead.
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The article "If Solar’s Rally Has Legs, These 2 Stocks Could Benefit Most" first appeared on MarketBeat.
