Recently, as the energy boom spawned by AI continues to ferment, photovoltaic solar racetracks are also gradually “emerging.” In just over a month, US PV stocks$First Solar (FSLR.US)$,$SunPower (SPWR.US)$The increase was over 50%. In the Hong Kong stock market,$GCL TECH (03800.HK)$Other companies are also booming in volume.
Some industry insiders said that recent attention to power demand in AI data centers has also led investors to view clean energy stocks as a market segment that can benefit from the AI boom; among them, photovoltaic solar energy stocks have been in a value depression for a long time. As industry fundamentals improve and policy coordination gain strength, AI development has not yet been fully priced, and it is expected that there will be room for further growth in the future.
AI “eats” electricity violently, or accelerates the transformation of energy systems
As can be seen from the latest quarterly results, global chip giant Nvidia's strong growth trend has not abated. In particular, the data center business, which accounts for revenue, grew 4.3 times over the previous year. In addition, various tech giants are also betting on AI to increase capital expenditure, and the rapid expansion of the data center business around the world has also made the demand for energy consumption stronger and stronger.
Previously, the International Energy Agency predicted that by 2026, the total electricity consumption of global data centers will increase from about 460 terawatt-hours in 2022 to at least 1,000 terawatt-hours. Goldman Sachs's recent research report also shows that by the end of 2030, AI will drive a crazy 160% increase in power demand in data centers. To support AI data centers alone, US power utilities will need to invest about 50 billion US dollars in next-generation power generation capacity.
As a result, photovoltaic power generation, as a segmented circuit in the energy sector, is expected to show huge potential for growth. OpenAI founder Sam Altman also supports the development of photovoltaic solar energy. According to foreign technology media The Verge, in January of this year, Altman stated at the World Economic Forum that the future of AI depends on clean energy (technology) breakthroughs. He stated:
“We still don't understand AI's energy needs... As AI matures, it's expected to consume a lot of electricity. Without (technological) breakthroughs, this goal cannot be achieved. We need (nuclear) fusion, or something cheaper solar+ that can store (energy) on a large scale.
In addition, major technology companies are also “going down” to invest in solar power facilities. In order to simultaneously meet the electricity consumption requirements of data center running AI and the 2030 clean energy target, AI giant Google has just signed agreements with a number of Japanese renewable energy suppliers to purchase clean electricity and build solar power plants dedicated to Google data centers. After Microsoft and Amazon, Google is another major AI company in Japan that exclusively invests in solar power supply.
With favorable policies and markets converging, the photovoltaic industry is expected to bottom up
This massive rise in PV stocks in the Hong Kong and US markets has not only benefited from the catalytic AI boom, but also inseparable from domestic and foreign policy support.
The one that gained the most in this round$First Solar (FSLR.US)$For example, this individual stock started trading after UBS released a bullish research report on May 21. It rose more than 40% over six trading days, and broke through the target price of 270 US dollars given by UBS Research in one fell swoop.
In the UBS Research Report, analysts said that as big tech companies seek clean energy to power surging data centers, the demand for electricity brought about by artificial intelligence continues to grow, and Daiichi Solar is in a unique position.
According to UBS, artificial intelligence uses 10 times more electricity than traditional Google searches. As demand for artificial intelligence electricity grows, Amazon, Microsoft, Meta, and Google have all promised to buy renewable electricity that matches their electricity consumption. Utility-grade solar energy has accounted for 80% of corporate power purchase agreements over the past five years, with four technology companies accounting for half of that demand. Furthermore, Daiichi Solar's share of the utility-grade market has grown from 15% in 2018 to 35% in 2022.
According to statistics from the US Energy Research Institute (IER), under the “Inflation Reduction Act”, Daiichi Solar is expected to receive about 1 billion US dollars in government subsidies every year for the next ten years, and the subsidies received by the company even account for 90% of its profits in 2023. Under the current subsidy policy, First Solar can receive various stages of subsidies and tax relief, and gross margin will nearly double for the next three years after the subsidy.
At the domestic level, the China Photovoltaic Industry Association recently organized a “Symposium on High Quality Development of the PV Industry” in Beijing. The conference pointed out that the crackdown on vicious competition in below-cost sales should be strengthened; industry mergers and restructuring should be encouraged, and market exit mechanisms should be unblocked. Previously, the long-term low price competition in the photovoltaic industry had largely affected the healthy development of the industry and limited the investment of enterprises in R&D and innovation. This policy is expected to strengthen the clearance of backward production capacity and accelerate the iterative development of the industry.
Meanwhile, the State Council issued the “2024-2025 Energy Conservation and Carbon Reduction Action Plan” yesterday, actively deploying the green energy transition. Various industries such as photovoltaics, energy storage, hydrogen energy, and new energy vehicles have ushered in benefits. Guojun Securities said that with the full cooperation of the industry, market and government, the development of the photovoltaic industry is expected to continue to develop at high quality, and expectations for improving the supply and demand pattern are expected to strengthen. Currently, the photovoltaic industry is already at the bottom of expectations. The fundamentals of the industry are expected to rise marginally as supply and demand improves expectations and the price bottom of the industrial chain stabilizes.
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