FSLR has posted its strongest week in months, up nearly 20% in seven days, yet the bears have not blinked — and that unresolved tension is the most interesting thing about this stock right now.
The rally has real foundations. First Solar's Q2 print delivered a 57% gross margin, and the Trump administration's polysilicon tariff announcement handed the company a structural edge that competitors relying on silicon-based modules cannot easily replicate. First Solar's cadmium telluride process uses no polysilicon at all. Every dollar added to the import cost of Chinese modules is, in effect, a pricing tailwind for Tempe. The recent earnings history underscores how sharply the market can move on good news here — the most recent print triggered a 5.8% jump on the day and a 22.8% gain over the following five sessions.
Short sellers, however, are not reading the same memo. Short interest has climbed to 9.8% of the free float — the highest level since early January — and critically, it rose even as the stock surged. Availability has tightened from around 37% in mid-July to roughly 35% now, putting the borrow market firmly in the tight range: for every three shares already lent out, only one remains available to new shorts. The direction of travel in the lending market is unambiguous. Bears are not covering into strength; they are adding. That makes this a genuine two-sided positioning battle rather than a simple short-squeeze setup, and it explains why the week's gains have not been cleaner.
The Street, for its part, is leaning bullish. Analyst targets have moved higher in the wake of the Q2 beat, and the consensus points to meaningful upside from current levels. The EPS surprise factor score ranks in the 79th percentile — the company has a track record of beating estimates when it matters. The growth picture is more complicated, though. Forward EPS growth year-on-year has swung from sharply positive at the start of 2026 to essentially flat now, and the 30-day and 90-day EPS momentum scores reflect that compression. Bulls are paying for a margin story and a policy tailwind; bears are questioning whether the backlog and demand picture can sustain either.
BlackRock's position, at nearly 12% of shares outstanding with a further 370,000 shares added through July, signals that the largest passive and active holders are not rushing to trim into the rally. State Street also added modestly in the same reporting period. The institutional base looks stable, which provides a floor but not a catalyst of its own.
The next formal test is Q3 earnings, flagged for late October. Between now and then, the key watch point is whether short interest continues to build above 9.8% of float — if bears keep adding at these levels while the polysilicon tariff framework gets formalised, the eventual squeeze pressure could become more acute. Equally, any softening in the tariff language or a step down in backlog disclosures would hand the shorts their fundamental justification.
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