Image: First Solar

US cadmium telluride (CdTe) thin-film solar manufacturer First Solar is facing a class action lawsuit investigation into its business practices following a recent downgrade of its stock.

The investigation is examining whether First Solar or its directors “engaged in securities fraud or other unlawful business practices,” on behalf of investors in the company. The investors involved have not been publicly disclosed.

The probe follows a downgrade of First Solar’s stock (FSLR) earlier this month by investment banking and capital markets firm Jefferies. After the downgrade, First Solar’s shares fell by US$27.67, or around 10%, trading on the NASDAQ as of 7 January 2026.

Jefferies cited lowered guidance for 2025, compressed profit margins, and the risk of potential “de-bookings” when it revised its rating on First Solar from “hold” to “buy.”

New York-based law firm Pomerantz, which specialises in representing defrauded investors, is conducting the investigation.

First Solar’s share price surged throughout 2025 alongside a major expansion of its US operations. The company’s stock traded at US$129.60 on 31 March 2025 and reached a peak of US$284.59 on 22 December 2025. During this period, First Solar also opened multiple manufacturing and research facilities across the United States.

Against this backdrop, the roughly 10% decline in early January could be viewed as a market correction following a period of rapid growth. However, Jefferies noted that the downgrade was driven by concerns beyond valuation alone.

In its assessment, Jefferies pointed to limited booking visibility, rising risks of order cancellations, and First Solar’s heavy exposure to Section 45X advanced manufacturing tax credits. These factors, the firm suggested, could pose challenges to the company’s earnings outlook and operational stability.