What Happened?
Shares of electricity storage and software provider Fluence (NASDAQ: FLNC) fell 8.2% in the afternoon session after President Donald Trump announced his administration would not approve new solar or wind power projects, causing a sell-off in the renewable energy sector.
The move came after President Donald Trump posted on his social media platform, Truth Social, that "We will not approve wind or farmer destroying Solar," adding, "The days of stupidity are over in the USA!!!" This statement escalated his campaign against renewable energy development. The remarks prompted a sector-wide sell-off, pressuring solar and wind stocks broadly. Other renewable energy companies also saw their shares plummet following the announcement, reflecting investor concern over the future of green energy projects under his administration.
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What Is The Market Telling Us
Fluence Energy’s shares are extremely volatile and have had 68 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 previous big move we wrote about was about 24 hours ago when the stock dropped 4.9% on the news that the major indices continued to pull back, with technology stocks accounting for most of the market's largest decliners.
A key reason for this trend is that much of the recent market gains were concentrated in the "AI trade," which includes these large technology and semiconductor companies. So this could also mean that some investors are locking in some gains ahead of more definitive feedback from the Fed.
Despite the downturn, some analysts viewed this as an opportunity to own some of the "Core AI winners." Dan Ives of Wedbush Securities commented, "In our view, the tech bull cycle will be well intact for at least another 2-3 years, given the trillions being spent on AI infrastructure/software/chips/power/apps looking ahead. This remains our tech playbook and investor roadmap." Additionally, mixed earnings reports from retailers, such as Target, have added to the market's weakness. Investors are closely monitoring these reports for insights into the broader economic health and the potential impact of new tariffs on inflation.
Fluence Energy is down 59.2% since the beginning of the year, and at $6.90 per share, it is trading 70.6% below its 52-week high of $23.50 from November 2024. Investors who bought $1,000 worth of Fluence Energy’s shares at the IPO in October 2021 would now be looking at an investment worth $197.11.
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