Geopolitical Risks Are Turning Energy into a Weapon – Why Investors Should Now Take a Closer Look at Nordex, RE Royalties, and First Solar

Nordex: The wind is finally turning in the right direction

Profitability over growth at any cost! This approach is clearly paying off for wind turbine manufacturer Nordex. The first quarter of 2026 provides concrete evidence that the strategic shift is bearing fruit. Revenue rose by 11% to EUR 1.6 billion, while operating profit (EBITDA) soared by a whopping 64% to EUR 131 million. The corresponding margin improved from 5.5% to 8.2%. The jump in profit is even more striking. Revenue rose from just under EUR 8 million in the previous year to EUR 54 million.

Fewer orders, but higher quality. What may sound contradictory at first is actually part of the strategy. Although order intake declined to 1.9 gigawatts, the average selling price per megawatt increased from EUR 0.87 million to EUR 0.91 million. The Group is deliberately avoiding low-margin volume orders. The filled order backlog of EUR 17 billion, up from just EUR 13.5 billion the previous year, provides ample planning security. CEO José Luis Blanco expressed confidence in meeting the annual forecast with an EBITDA margin between 8% and 11%.

The new turbine technology could serve as an additional boost. Nordex is driving forward the further development of its Delta4000 platform. An operating mode with a rated output of 7.3 MW has been activated for the N175/6.X model. This delivers up to 1.7% more energy yield. At the same time, a hybrid tower solution with a hub height of 162.5 m is being launched, which is specifically optimized for low to moderate wind conditions in Germany. More than 3 GW in firm orders for this turbine class demonstrate strong customer interest. The stock is currently trading at EUR 46.72.

RE Royalties - Sorting Through Its Options

The Canadians are going on the offensive. After 10 years in the business of royalty financing for renewable energy projects, the management team led by CEO Bernard Tan has initiated a strategic review. Everything that could increase shareholder value is being examined, from co-investments to capital structure optimization to a potential sale of the company; all options are on the table. This is not a sign of weakness, but of maturity. A company that has proven its model and now has a pipeline of approximately CAD 20 million in signed letters of intent, as well as inquiries totalling over CAD 200 million currently under review, is justified in considering its next strategic move.

The foundation remains solid. Just this past January, RE Royalties secured a royalty stake in 25 US solar projects from Solaris Energy with terms of 25 years or more. The model is simple. Project developers receive non-dilutive capital, and RE Royalties participates in the plants' revenue. The key advantage is that the revenues are inflation-resistant and largely independent of electricity price fluctuations, as they are based on kilowatt-hours produced. With over 100 royalty agreements across North and South America and Asia, the company has built a remarkably diversified portfolio.

In parallel with the review, management has adjusted the dividend policy. Instead of quarterly payments, dividends will be distributed once a year going forward. At first glance, this may seem like less, but it is a clever move. It provides more financial flexibility to capitalize on the promising opportunities in the pipeline. The repayment of the green bonds, which was largely completed at the end of last year, also lightens the balance sheet. Anyone looking for sustainable cash flows from renewable energy should keep an eye on this under-the-radar candidate, especially as the strategic review begins to bear fruit. The stock is currently trading at CAD 0.38.

First Solar - Between Record Margins and Political Risk

A strong quarter, but not all that glitters is gold. First Solar delivered solid results to kick off 2026. Net income surged 65% to USD 347 million, and the gross margin rose to an impressive 47%. This was driven by high capacity utilization of 96% at its US plants, coupled with tax benefits from the Inflation Reduction Act. The problem is the operating cash flow, which was deep in the red at minus USD 216 million, due to accumulated inventory of USD 1.1 billion and receivables from subsidy programs. The high profitability is, therefore, in part, only on paper.

The strategic trump card is US production, but risks lurk here as well. While domestic factories are running at full capacity, the plants in Malaysia and Vietnam are languishing, with rising underutilization costs of up to USD 155 million. The new CuRe technology is expected to generate up to USD 600 million in additional revenue from the order backlog, but the order backlog has recently shrunk to 47.9 GW. The book-to-bill ratio, well below 1, does not currently point to sustainable growth.

Political decisions remain the biggest source of uncertainty. The upcoming Section 232 decision on polysilicon derivatives and the planned FEOC rules are holding customers back. Major customer BP has already terminated existing contracts.

Although the valuation appears moderate at first glance, with a price-to-earnings (P/E) ratio of around 14, normalizing for government subsidies pushes the multiple above 46. Until the regulatory framework is clarified, a wait-and-see approach remains the wiser strategy. Currently, one share costs USD 219.95.

The energy sector remains exposed to geopolitical risks, but it is precisely there that savvy investors find opportunities. Nordex impresses with more profitable growth, higher margins, and a full order book. RE Royalties offers a unique, inflation-resistant financing model and is now exploring strategic options to enhance value. First Solar is posting a record gross margin, but is struggling with negative operating cash flow and massive political risks. It is wiser to wait and see here. The real bottleneck remains securing stable, long-term financing for green scaling.