Why Are ENPH, FSLR, ARRY, SEDG Stocks Rising Overnight?

• The order cited potential cybersecurity risks and domestic supply chain concerns. 
• It covers equipment including transformers, generators, grid-connected inverters, battery storage systems, circuit breakers and industrial control systems. 
• Trump has also tasked Energy Secretary Chris Wright with implementing the restrictions.

Shares of Enphase Energy Inc. (ENPH), First Solar Inc. (FSLR), Array Technologies Inc. (ARRY), and Solaredge Technologies Inc. (SEDG) edged higher overnight after U.S. President Donald Trump announced new restrictions on foreign-made power inverters.

On Wednesday, the president signed an emergency order banning U.S. purchases or installations of certain foreign bulk-power system electrical equipment and associated software, citing potential cybersecurity or operational risks. 

ENPH stock gained nearly 2% in the overnight session, while FSLR stock, ARRY stock, and SEDG stock all edged about 1%, 1.3% and 0.39% higher at the time of writing. 

Potential Security Threats Cited As A Reason For The Order

The executive order restricts U.S. transactions involving foreign-produced bulk-power equipment when the equipment or its components, software, firmware, digital services, or remote-access capabilities come from entities deemed a national-security risk. 

It covers equipment including transformers, generators, grid-connected inverters, battery storage systems, circuit breakers, and industrial control systems. 

“The rapid growth of advanced manufacturing, data centers, artificial intelligence, and defense production has increased the Nation’s dependence on abundant, reliable electricity and magnified the consequences of a successful attack or supply disruption on the bulk-power system,” the order said. 

“Further, continued United States reliance on foreign sources of bulk-power system electric equipment with these potential national security vulnerabilities also creates a supply chain vulnerability that could eliminate the supply of these products in the United States as a result of disruptions in international trade or other causes,” it added. 

Trump has also tasked Energy Secretary Chris Wright with implementing the restrictions, including determining which transactions pose unacceptable risks, developing rules for pre-qualifying secure equipment and vendors, and, within 180 days, recommending changes to federal procurement rules that prioritize U.S.-manufactured energy infrastructure.

Wall Street Stance

On Wednesday, UBS upgraded SolarEdge Technologies to ‘Buy’ from ‘Neutral,’ and hiked its price target to $42, implying a potential upside of about 40% from the last close following the executive order from the Federal Communications Commission (FCC). 

UBS said that it believes the new order could tighten U.S. inverter supply, helping SolarEdge gain market share and potentially help price increases.

Deutsche Bank raised the price target on First Solar to $299 from $272 and maintained a ‘Buy’ rating on the shares, citing its policy analysis for the target boost. The revised target implies an upside of more than 45% from the stock’s last closing price. 

What’s Retail Saying About ENPH, FSLR, ARRY, SEDG Stocks?

On Stocktwits, retail sentiment around ENPH stock improved from ‘bearish’ to ‘neutral’ territory over 24 hours. 

Meanwhile, sentiment on FSLR was still ‘bearish’ at the time of writing. ARRY stock and SEDG stock sentiment were in the ‘bullish’ territory. 

ENPH stock is up nearly 14% this year, while SEDG stock is up more than 5%. 

Meanwhile, FSLR stock has declined nearly 25% in the same time and ARRY stock has tumbled more than 51%. 

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