Solar Winners: SunPower, AEIS

Sunpower finished trading on Thursday above the $14 mark, a small victory for the U.S. solar stock, which has hovered in a range between $12 and $14 since mid-June.

The earnings results from Advanced Energy Industries(AEIS) was also sending solar shares higher on Thursday. Advanced Energy Industries beat the Street in its earnings on Thursday and upped its guidance for both third quarter earnings and revenue significantly -- in the case of revenue, a 30% to 40% increase over the previous expectations.

AEIS shares were up more than 23% on Thursday after the bullish guidance, and for the first time this year, AEIS experienced a day on which more than 2 million of its shares were traded.

Advanced Energy has been growing its solar inverter business, but it was historically not a core focus of the company, so it's growth in market share is off a small base, Edwin Mok, analyst at Needham & Co. explained. Additionally, Advanced Energy is a relatively new entrant to the European space. This doesn't mean that the AEIS earnings can't be seen as a read-through for solar demand more generally, as its strong outlook for third quarter is partially driven by growth in the inverter space.

In the end, the AEIS results were a reiteration of the high demand in solar that has already been a given among investors in the space.

However, given the AEIS business-specific strategy shift to inverters, it's not just a robust solar demand story in the third quarter outlook, but the market share gains that AEIS is making. Advanced Energy said on its earnings conference call that it expects fourth-quarter inverter sales to grow also. AEIS had traded almost double its average volume of shares, which is 436,000, before the midday mark on Thursday.

German inverter company SMA Solar Technology provided one of the first indications of the current high level of demand earlier this month when it also raised guidance significantly.

-- Written by Eric Rosenbaum from New York.

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