Solar stocks are splitting on Thursday. Enphase Energy (NASDAQ:ENPH | ENPH Price Prediction) is up 15% to $48.13 and SolarEdge Technologies (NASDAQ:SEDG) is up 17% to $50.04, while Canadian Solar (NASDAQ:CSIQ) is down 11% to $17.91.
It’s a sharp rotation within the solar complex. Canadian Solar was the one-month leader heading into today, up 58% through Wednesday’s close, while SolarEdge had actually slipped 1% over the same stretch.
The lopsided trade in ENPH, SEDG, and CSIQ highlights how three names lumped into the same sector can react in opposite directions when business models diverge. Residential-focused names are catching a bid while utility-scale module makers face renewed margin scrutiny.
Residential Solar Catches a Bid
ENPH and SEDG are both residential solar plays, and that end market is showing signs of life. Enphase’s most recent quarter flagged U.S. sell-through demand up 21% sequentially, the strongest read in two years, while SolarEdge CEO Shuki Nir said the company has “shifted decisively to offense” after six straight quarters of non-GAAP gross margin expansion.
A cooperative rate backdrop is helping Enphase and SolarEdge. The 10-year Treasury yield sits at 4.46%, modestly below the year-ago level of 4.53%, which keeps solar financing math more workable for homeowners.
Year-to-date, SEDG stock is up 68%, leading the trio. ENPH stock has gained 49% over the same window.
Canadian Solar Earnings Disappoint Under the Hood
Canadian Solar reported Q1 2026 results this morning. The headline numbers looked fine: revenue of $1.08 billion exceeded expectations, and the loss per share of $0.71 was narrower than the $1.03 loss analysts expected.
The problem is what’s underneath Canadian Solar’s results. Gross margin of 25% was inflated by a $93 million IEEPA tariff refund tied to the U.S. Supreme Court ruling on reciprocal tariffs. Strip that out and margins land closer to 12%.
Canadian Solar’s Q2 guidance reinforced the concern. Management guided revenue to $1 billion to $1.2 billion with gross margin of 13% to 15%, a sharp step-down as the tariff windfall rolls off. Solar module shipments fell 64% year over year, and operating cash flow swung to negative $208.7 million.
A Tale of Two Solar Business Models
Canadian Solar’s utility-scale module business is exposed to commoditization pressure from Chinese manufacturers, while Enphase and SolarEdge sell higher-margin power electronics into the U.S. and European rooftop market. That structural difference helps explain why CSIQ trades on tariff and commodity dynamics while ENPH and SEDG track residential demand.
The one-year picture shows the gap. SEDG stock is up 170% over the past year, CSIQ stock is up 76%, and ENPH stock is down 1%, reflecting just how differently these names trade despite the shared “solar” label.
What to Watch
Investors will watch for whether the residential solar bid sticks into the close, or whether ENPH and SEDG fade if the day’s enthusiasm cools. Solar stocks are notoriously volatile, and one session doesn’t confirm a sustained inflection.
For Canadian Solar, the next cue is whether analysts trim numbers after the Q2 2026 margin guide. Prudent investors may want to size positions modestly given how quickly sentiment in this complex can flip.
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