What Happened?
Shares of residential solar energy company Sunrun (NASDAQ: RUN) jumped 10.4% in the afternoon session after RBC Capital upgraded the stock to 'Outperform' from 'Sector Perform,' citing greater certainty around federal solar tax credits.
RBC Capital raised its price target on the residential solar company to $16 from $12, attributing the move to increased certainty about long-term growth opportunities. The upgrade follows recently clarified U.S. Treasury guidance on the Investment Tax Credit (ITC), which the firm believes de-risks Sunrun's future. This is the latest in a series of bullish calls from Wall Street, with Wells Fargo, UBS, and JP Morgan also recently increasing their price targets. The positive sentiment is underpinned by Sunrun's strong second-quarter earnings report from early August, where the company shattered expectations by posting a surprise profit of $1.07 per share, decisively beating the consensus estimate for a loss.
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What Is The Market Telling Us
Sunrun’s shares are extremely volatile and have had 78 moves greater than 5% over the last year. But moves this big are rare even for Sunrun and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 4.6% on the news that an unexpectedly sharp rise in wholesale inflation fueled concerns about rising costs and their impact on corporate profits. The primary catalyst was the July 2025 Producer Price Index (PPI), a measure of inflation at the wholesale level, which jumped 0.9% against forecasts of a 0.2% rise. This represents the most significant monthly increase in over three years, pointing to mounting cost pressures for manufacturers, with tariffs cited as a key factor. This data complicates the Federal Reserve's upcoming interest rate decisions, as persistent inflation may prevent rate cuts, creating a headwind for cyclical sectors like Industrials.
Sunrun is up 47.6% since the beginning of the year, but at $15.07 per share, it is still trading 29.9% below its 52-week high of $21.50 from August 2024. Investors who bought $1,000 worth of Sunrun’s shares 5 years ago would now be looking at an investment worth $325.39.
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