What Happened?
A number of stocks fell in the afternoon session after surging long-term Treasury yields crushed the group's cost-of-capital outlook.
The selloff followed FOMC minutes showing Fed officials were open to tightening if inflation did not cool, paired with energy-driven inflation fears after the U.S. launched "Economic Warfare" against Iran, according to CNBC. Because renewable energy installations require massive upfront capital and generate returns over decades, the sector is uniquely sensitive to the discount rate.
Higher Treasury yields mechanically increase financing costs for utility-scale developers and push up loan rates for residential solar buyers, threatening to freeze demand. The macroeconomic pressure overpowered earlier optimism from an August 6 White House proclamation that added a 15% duty and a minimum import price on polysilicon products, according to the Center on Global Energy Policy.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Renewable Energy company Nextpower (NASDAQ: NXT) fell 5.3%. Is now the time to buy Nextpower? Access our full analysis report here, it’s free.
- Renewable Energy company Array (NASDAQ: ARRY) fell 6.1%. Is now the time to buy Array? Access our full analysis report here, it’s free.
- Renewable Energy company American Superconductor (NASDAQ: AMSC) fell 4.4%. Is now the time to buy American Superconductor? Access our full analysis report here, it’s free.
Zooming In On Array (ARRY)
Array’s shares are extremely volatile and have had 72 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 34.8% on the news that the company reported mixed fourth-quarter results, which were overshadowed by a weak financial outlook for the full year.
While Array's revenue of $226 million beat analyst expectations and its adjusted earnings per share of $0.01 met forecasts, investors focused on the negatives. The company's guidance for the upcoming financial year 2026 disappointed Wall Street.
The adjusted EBITDA forecast of $215 million at the midpoint came in well below the $256.4 million consensus, and the adjusted EPS guidance of $0.70 at the midpoint also missed analyst estimates. Furthermore, profitability was a major concern, as the company's gross profit margin declined by 19.9 percentage points year on year. The weak guidance and shrinking margins appeared to be the primary drivers for the sell-off.
Array is down 51.3% since the beginning of the year, and at $4.72 per share, it is trading 60.6% below its 52-week high of $11.96 from February 2026. Investors who bought $1,000 worth of Array’s shares 5 years ago would now be looking at only $250.93.
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