President Donald Trump’s attacks on renewable power have prevented traders from seeing the sturdy underlying demand for solar energy and the stocks that stand to learn, UBS analysts informed shoppers in a notice on Wednesday. Solar gear producers First Solar and Nextracker , specifically, will profit from sustained electrical energy demand from synthetic intelligence knowledge facilities, the UBS analysts mentioned. The tech sector needs clear power to energy AI, and solar is faster and cheaper to construct than different electrical energy sources, they mentioned. “We view solar hardware equipment suppliers as key ‘picks & shovels’ plays on the ongoing AI ‘gold rush,'” analyst Jon Windham and his staff informed the financial institution’s shoppers. Solar market sentiment is bettering after renewable stocks declined from 2021 by way of this spring as rates of interest, provide chain points and Trump’s return to the White House weighed on the sector, the UBS analysts mentioned. First Solar has gained 14% this yr whereas Nextracker is up greater than 80% regardless of Trump’s persistent attacks on renewable power . Worst-case state of affairs prevented Investors fretted for months over what the second Trump administration would do to the renewable power tax credit handed underneath President Joe Biden. Uncertainty has given solution to readability with the passage of Trump’s One Big Beautiful Bill Act (OBBB) in July, the analysts mentioned. “U.S. policy is largely now in place and we expect investor interest to increase,” Windham mentioned. “Broadly, sentiment for the sector has been improving since May … as worst-case scenarios for policy were rapidly taken off the table.” Republicans stored in place the manufacturing tax credit score for solar gear that Democrats handed underneath Biden. This places First Solar and Nextracker better off attributable to their home manufacturing footprints, the UBS analysts mentioned. “As the incumbent large market share domestic producers, they benefit significantly from tax credits funding potential industry consolidation and further product innovation,” Windham mentioned. The OBBB permits solar initiatives to qualify for the funding and manufacturing credit by way of 2030 if they start development by July 2026. And the Foreign Entity of Concern (FEOC) provisions are workable, in keeping with UBS. FEOC provisions bar U.S. clear power tax credit for corporations associated to China, Russia, North Korea and Iran. “In our view, concerns over potential negative policy outcomes from the Trump Administration obstructed investors’ recognition of strong underlying technology-driven demand for solar,” Windham mentioned. “As long as AI data center demand grows, regardless of which specific application or company wins, solar is likely to benefit,” he mentioned.