• Daqo New Energy’s subsidiary Daqo Energy Technology (Shanghai) Co. Ltd. has signed an agreement to build a new Kunshan manufacturing base focused on R&D, production, and sales of next-generation energy solutions for AI data centers, including energy storage systems, solid-state transformers, circuit breakers, and batteries, with Phase 1 investment of about RMB 2,100 million and a preliminary total of about RMB 6.00 billion, although the future impact on performance remains uncertain.
• This move marks a significant expansion beyond Daqo’s core polysilicon business into AI-oriented power infrastructure, potentially broadening its role across the wider energy technology supply chain.
• Next, we’ll examine how this planned RMB 6.00 billion AI data center energy base reshapes Daqo New Energy’s existing investment narrative.

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Daqo New Energy Investment Narrative Recap

To own Daqo New Energy today, you need to believe that a recovery in polysilicon fundamentals can eventually outweigh persistent losses and industry overcapacity. The Kunshan AI data center energy project adds a long term diversification angle, but its financial impact is uncertain and does not change the key near term catalyst: any sign of pricing or utilization improvement in polysilicon. It also does not remove the biggest risk, which is continued operating losses eroding Daqo’s cash strength.

The announcement that best frames this new RMB 6,000 million project is Daqo’s Q1 2026 earnings, where sales fell to US$26.72 million and net loss widened to US$88.38 million. Against that backdrop, a capital intensive expansion into next generation energy solutions raises clear questions about future cash deployment and execution, especially while the core polysilicon business remains under profit pressure and relies heavily on eventual industry repair.

But against this expansion story, investors should also be aware that...

Daqo New Energy's narrative projects $1.4 billion revenue and $163.1 million earnings by 2029.

Uncover how Daqo New Energy's forecasts yield a $31.86 fair value, a 89% upside to its current price.

Exploring Other Perspectives

Some of the most pessimistic analysts were already assuming revenue of only about US$1.4 billion and no profitability by 2028, so this AI focused expansion could either ease their concern about heavy reinvestment draining Daqo’s US$2.21 billion cash pile or reinforce it, which is why it helps to compare these harsher views with more optimistic ones before you decide where you stand.

Explore 3 other fair value estimates on Daqo New Energy - why the stock might be worth just $31.86!

The Verdict Is Yours

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Daqo New Energy research is our analysis highlighting 2 key rewards that could impact your investment decision.
• Our free Daqo New Energy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Daqo New Energy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.