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U.S. Inflation Data Spurs Solar Stocks Rally: ENPH, FSLR, SPWR, and ARRY Lead the Charge

Solar stocks, including Enphase Energy (NASDAQ: ENPH), First Solar (NASDAQ: FSLR), SunPower Corporation (NASDAQ: SPWR), and Array Technologies (NASDAQ: ARRY), experienced a remarkable rally on Tuesday. This surge was triggered by a positive U.S. inflation report for October, signaling a potential pause in the Federal Reserve’s interest rate hikes.

Rising interest rates have made it difficult for solar projects to secure finance and have led to a downturn in investor sentiment. The possibility of relief from rate hikes prompted investors to flock back to solar stocks, now available at discounted prices.

Enphase Energy (NASDAQ: ENPH), a microinverter provider, closed up about 17% at $91.39 on Tuesday following a challenging year where the stock had dropped around 65%.

First Solar (NASDAQ: FSLR), a leading manufacturer in the utility-scale market, experienced an 11.43% uptick to close at $$149.14. The bullish momentum pushed First Solar into positive territory for the year, boasting a roughly 2% year-to-date gain.

Residential-focused SunPower Corporation (NASDAQ: SPWR) recorded a notable uptrend, surging over 15% to $4.39. The stock is down 75% year-to-date.

Array Technologies (NASDAQ: ARRY), the solar tracker manufacturer, posted a gain of about 10% at $15.30. The stock has lost 20% of its value this year. The positive momentum comes after a recent setback when the company reported third-quarter sales that fell short of estimates.

Solar Stocks: Worst Performer in 2023

In a broader context, the Energy-Solar industry group, consisting of 24 stocks, saw a collective surge of around 10% as of midday Tuesday. However, this group has endured a challenging year, posting a cumulative loss of 42.5% in 2023, making it the worst performer among the 197 industry categories tracked by MarketSmith based on six-month price performance.

This unexpected surge comes amid a challenging earnings season for the solar industry. Multiple firms posted double-digit losses following their reports in recent weeks. Companies like Enphase Energy and SolarEdge (NASDAQ: SEDG) have warned of slowing demand, particularly in Europe.

The U.S. solar industry, however, remains optimistic, expecting to add a record 32 gigawatts of new capacity in 2023, reflecting a 52% increase from the past year, as reported in a September release by the Solar Energy Industries Association and research firm Wood Mackenzie.

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