Nextracker Stock Rockets as AI and Solar Tailwinds Align

Key Points

• Nextracker's beat-and-raise quarter, new deals, and regulatory clarity have the stock in rally mode, heading higher in 2025.
• The growing backlog and international growth opportunity suggest that long-term forecasts are likely low. 
• Analysts and institutional activity support the outlook for higher share prices this year.

While regulatory challenges present headwinds for some solar stocks, Nextracker NASDAQ: NXT only has tailwinds. Its sun-tracking arrays and cost-saving advancements maximize solar panel output and are essential to the solar industry. Not only is this reflected in the results, but the company is also focusing on AI, a move that can only improve its operations.

AI will likely improve internal efficiencies and the company’s product, which utilizes advanced algorithms to maximize panel direction on a row-by-row basis, and help sustain the demand long-term. 

Market support is seen clearly in the price action. The NXT share price corrected following the Q1 release but quickly rebounded and is rocketing higher as of mid-August. The action has the market trading at a new high, set up to continue higher and advance by another $15 to $20 before year’s end. 

Nextracker Wows Analysts With Results and Guidance Update

The analyst expected a solid quarter, which they got from Nextracker in Q1. The $864 million in revenue is up 20% compared to last year and outpaced the consensus by nearly 250 basis points. The gains were driven by strength in domestic and international markets, which led to a 27% increase.

Notable strength was seen in the Hail Pro, a weather-resistant model, and other advanced technologies. 

The margin news is also good. The company widened its income margin despite tariff impacts and produced a better-than-expected bottom-line result.

The critical details are that this company is profitable, runs an approximately 20% adjusted net profit margin, and grew earnings at an accelerated 25% pace in Q1. 

The guidance aligns with this trend, which has increased. It expects approximately 15% revenue growth in the middle range and earnings to run flattish. 

The analysts' response is notably robust, including numerous price target increases and two upgrades. The consensus as of mid-August is a Moderate Buy, and the price target, although lagging the price action, provides support due to the leading quality of the uptrend.

The recent revisions have placed this stock in the high-end range, near $80, marking fresh highs when reached. Guggenheim, upgraded to Buy from Neutral with a $74 price target, cited clarity in IRS regulations and a significant manufacturing opportunity.

Likewise, the institutions, which own about 68% of the stock, are bullish on Nextracker. They have bought on balance every quarter of 2025, including the first half of Q3, netting about $2 in shares for every $1 sold. Assuming that trend continues, the 6% short interest will start getting squeezed out of the market and aid in the stock's price advance. 

Pipeline and Balance Sheet Strength Support Uptrend in NXT Stock

Although the long-term outlook is good, it is likely to be low due to the growing pipeline. Not only did the backlog increase to over $4.75 billion as of the quarter’s end, but the company has also reported new business that will likely lead to more.

The latest is 1.5 gW in projects in Brazil contracted by local utility Casa dos Ventos. The four utility-scale projects affirm the company’s position within the renewables and solar industry and the potential for international expansion. 

International business accounts for less than 35% of the total, making the opportunity significant. The balance sheet remains healthy, with no debt and ample capitalization, leaving the company in a solid position capable of executing its strategy.