Please ensure Javascript is enabled for purposes of website accessibility

Why SunPower's Shares Plunged 10.4% on Monday

By Travis Hoium – Updated Aug 5, 2019 at 5:04PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A trade war with China isn't helping solar stocks today.

What happened 

Shares of SunPower (SPWR 0.85%) plunged as much as 10.4% in trading Monday as China's trade and currency disputes with the U.S. continued. The stock closed down 7.6% for the day. 

So what

Last week, President Trump imposed additional tariffs on Chinese imports, and over the weekend fears rose that the trade war would get worse. And China allowed the yuan to fall to a decade low, which makes products like solar panels from China cheaper in the U.S. 

Large solar farm in a field.

Image source: SunPower.

SunPower has a strange relationship with China because it's competing against commodity solar manufacturers that will benefit from a cheaper yuan, but it's also producing products in China. The P-Series product that assembles commodity solar cells into a solar panel that's slightly more efficient than competitors' offerings is primarily produced in China, and this could make that product cheaper to sell to the rest of the world. 

Now what

The entire market fell today and solar stocks dropped because investors fear Chinese competition for U.S. companies. But I don't think this fundamentally changes anything for SunPower, and in some ways could make its P-Series product more competitive around the world. This isn't a reason to sell, and after a solid earnings report this could be a good buying opportunity for long-term investors. 

Travis Hoium owns shares of SunPower. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

SunPower Corporation Stock Quote
SunPower Corporation
SPWR
$24.77 (0.85%) $0.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
327%
 
S&P 500 Returns
105%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.