There weren’t any S&P 500 earnings reactions yesterday…
But a major policy headline just rocked the solar industry, and we think it's worth noting.
Late last night, the Senate Finance Committee unveiled a surprise proposal to phase out clean energy tax credits by 2028.
This was well ahead of schedule.
Investors had been pricing in years of continued subsidy support. The abrupt shift caught the industry completely offside.
To make matters worse, a major Wall Street bank doubled down on its bearish view this morning. They're specifically targeting residential solar names like Sunrun $RUN, SolarEdge $SEDG, and Enphase $ENPH.
The market’s response? Carnage.
The Solar ETF $TAN started the day down 10.5% in pre-market trading 📉
As you can see, it's very unusual for the Solar ETF to have a double-digit percentage move in a single day.
However, today was extra violent. Before the market opened, the price had crashed by over 10%.
Every stock was getting smoked.
Many names are still down a lot as we're writing this intraday.
Sunrun, SolarEdge, and Enphase Energy are leading the way on the downside, down 41.5%, 37.2%, and 25.5%, respectively.
On the flip side, we're looking for names showing relative strength in this tape.
At the top of our list is the $8.8B Solar Software stock, Nextracker $NXT.
It's quietly emerging as one of the industry's true standouts.
Since its IPO in early 2023, the company has consistently delivered, earning positive earnings reactions in 7 of its 10 quarterly reports.
At the core of its business is the intelligent solar tracking technology.
This software helps utility-scale solar panels maximize energy output by following the sun throughout the day.
It’s one of the most vital pieces of infrastructure for the global energy transition.
And they're growing faster and more profitably than many of their peers.
Margins are expanding, free cash flow growth is accelerating, and management is guiding for a strong 2025.
This is a business that's not just surviving the solar shakeout... It's thriving.
Here's the setup in NXT 👇
Nextracker is coiling below a shelf of former highs and looks ready to blast off to new all-time highs soon.
Relative to TAN, the stock has already resolved a similar basing pattern and is making new all-time highs.
We want to buy NXT on strength above 62, targeting 82 and 113 over the coming quarters.
Thank you for reading.
- The Beat Report Team
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