Elon Musk's endorsement of solar energy as the “linchpin” of the global power transition at the 2026 World Economic Forum in Davos triggered a rally across the solar energy sector.
Solar stocks like First Solar, Inc. (NASDAQ:FSLR), Sunrun, Inc. (NASDAQ:RUN), Canadian Solar, Inc. (NASDAQ:CSIQ), Ascent Solar Technologies, Inc. (NASDAQ:ASTI) and SolarEdge Technologies, Inc. (NASDAQ:SEDG) were trading higher on Friday
The AI Power Bottleneck
Musk's thesis is simple: the rapid ascent of AI has created a massive electrical bottleneck. He noted that while chip production is scaling exponentially, power generation is lagging. He pointed to solar energy as the solution.
By positioning solar as the primary energy source for AI data centers, Musk provided a fundamental demand floor for the industry, reassuring investors that the AI revolution will essentially subsidize a massive solar build-out.
Removing ‘Artificial Barriers’
Perhaps the most market-moving part of his speech was the direct criticism of U.S. solar tariffs. Musk labeled them “artificial barriers” that inflate deployment costs.
- First Solar: As a domestic manufacturing giant, they often benefit from protectionism, but Musk's call for a high-efficiency, low-cost global market suggests a shift toward pure technological competition.
- SunRun and SolarEdge: The residential and inverter-focused companies stand to gain significantly from lower hardware costs, which would accelerate consumer adoption.
Geographic and Orbital Frontiers
Musk argued that small slices of the U.S. Southwest deserts or Sicily and Spain could power entire continents.
More radically, he predicted that the lowest-cost energy for AI would soon come from space-based solar satellites launched by SpaceX, aiming to achieve viability within two to three years.
Bottom line: the world's most influential technologist just declared solar the ultimate winner of the 2020s energy race and the stocks are climbing in response.
Photo: Shutterstock
