In the world of stocks, AI-picked stocks have been making significant waves, with PRFT soaring by 55% in just 16 days. As we head into June, investors are keeping a close eye on the top picks for the month.

One notable development comes from UBS, which has raised the price target for First Solar (NASDAQ:FSLR) shares. The financial firm has upped the target to $270 from $252, maintaining a Buy rating for the company.

UBS’s positive outlook for First Solar is underpinned by the expected growth in earnings per share (EPS) and gross margins, along with the potential benefits from U.S. tax credits. The forecast indicates a substantial rise in First Solar’s EPS, from $7.74 in 2023 to a projected $36.74 by 2027. Moreover, the company’s gross margin is anticipated to see a notable improvement, increasing from 39% in 2023 to 64% in 2028, taking into account the advantages of domestic manufacturing tax credits from the U.S. Inflation Reduction Act (IRA).

UBS projects that First Solar’s net cash will surpass $115 per share by 2028, reflecting a strong financial position for the company. The firm views First Solar as a technology leader that is well-positioned to benefit from the increasing demand for its products. Given these positive indicators, UBS believes that the company’s valuation justifies a higher multiple.

Furthermore, UBS points out that First Solar stands to gain from the rising demand for AI-driven electricity. As major tech companies commit to 100% renewable energy policies, with many entering into Power Purchase Agreements (PPAs) to match their nonrenewable electricity consumption, First Solar’s role in this ecosystem becomes increasingly significant. Understanding the dynamics of corporate renewable energy strategies is crucial for assessing the investment potential of First Solar.

For investors interested in delving deeper into First Solar’s market outlook, UBS recommends referring to their comprehensive report on 100% renewable-powered AI data centers.