- BofA Rating Update: Bank of America has reaffirmed its Buy rating on Array Technologies (ARRY) for 2026, citing a “margin-first” growth strategy that outperforms utility-scale peers in a high-interest-rate environment.
- Fiscal Catalysts: The company is successfully capturing the Section 45X production tax credit of 2.4 cents per watt, bolstered by new 2026 “Domestic Content” certifications that unlock an additional 10% ITC bonus for customers.
- AI and Software Integration: Array’s pivot to SmarTrack™ machine learning software has significantly narrowed the efficiency gap with Nextracker, transforming the firm from a hardware fabricator to a high-margin tech provider.
The utility-scale solar landscape of 2026 is no longer defined by simple steel and glass; it is a battleground of algorithmic efficiency and supply chain resilience. As the industry grapples with the sunsetting of early-decade subsidies and the rise of sophisticated grid demands, Bank of America Securities has signaled to institutional investors that Array Technologies (ARRY) remains a premier vehicle for alpha. While the broader cleantech sector faces scrutiny over execution, Array’s transition into a “software-defined hardware” company has created a moat that the market is only beginning to price in.
Institutional Conviction: Why BofA is Doubling Down in 2026
Bank of America’s equity research team continues to feature Array Technologies as a “top-tier conviction” pick. Unlike the speculative volatility of 2023, the 2026 thesis is grounded in disciplined margin expansion. Analysts point to the company’s ability to navigate the complexities of the Inflation Reduction Act (IRA) better than mid-cap competitors. By securing a robust domestic supply chain for torque tubes and structural components, Array is not just selling trackers—it is selling tax-compliance security.
The firm has maintained its position on BofA’s flagship “US 1” list, a designation reserved for companies with superior free cash flow profiles and defensible market share. For investors navigating a landscape where AI agent-driven payment infrastructures and automated logistics are becoming the norm, Array’s integration of digital-first operations provides a layer of stability that pure-play hardware firms lack.
Pro-Tip: The “Domestic Content” Multiplier
In 2026, the real value for Array customers lies in the 10% Investment Tax Credit (ITC) bonus. Array’s 2025 pivot to 100% US-sourced steel for its DuraTrack H-Z-7.5 systems allows developers to meet the strict domestic content thresholds required by the Department of Treasury, often the deciding factor in project financing.
Comparative Analysis: Array Technologies vs. Nextracker (NXT)
One cannot analyze Array without benchmarking it against its primary rival, Nextracker. Historically, Nextracker held the advantage in complex terrain and software yields. However, Array’s 2026 roadmap has seen a massive surge in R&D, specifically targeting terrain-following capabilities and diffuse light optimization.
| Metric (2026 Est.) | Array Technologies (ARRY) | Nextracker (NXT) |
|---|---|---|
| Market Position | Leader in Centralized Trackers | Leader in Decentralized Trackers |
| Software Optimization | SmarTrack™ (ML-Driven) | TrueCapture™ (Proprietary) |
| IRA Benefit Realization | High (Structural Focus) | Moderate-High (Global Sourcing) |
The gap is closing. While Nextracker pioneered the software-enhanced yield, Array’s SmarTrack technology now uses machine learning to adjust panel angles during overcast conditions, reclaiming up to 5% of energy production that was previously lost. This software-hardware synergy is a primary reason BofA views Array as a “margin story with a growth option.”
The Impact of Section 45X and SmarTrack Software
Array’s financial engine is currently fueled by the Section 45X Advanced Manufacturing Production Credit. By manufacturing torque tubes and structural fasteners within the United States, Array qualifies for a 2.4 cents per watt credit. In the thin-margin world of energy infrastructure, these credits represent a significant portion of the company’s EBITDA growth.
Beyond the tax benefits, the operational shift toward resilient supply chains has allowed Array to mitigate the logistics bottlenecks that plagued the industry in previous years. Their “hub-and-spoke” manufacturing model in the American Midwest has reduced shipping lead times by 30% compared to 2024 levels.
“We view Array as uniquely positioned to capitalize on the ‘Phase 2’ of the IRA. It isn’t just about building anymore; it’s about optimizing what is already in the ground.” — Extract from BofA Securities 2026 Energy Outlook.
Investment Outlook: Is There More Room to Run?
With a current consensus price target hovering in the $32–$35 range, the upside remains compelling for those with a three-to-five-year horizon. Array’s minimal exposure to interest rate fluctuations—thanks to a restructured debt profile in late 2025—makes it a “defensive growth” play in a volatile market. As the world accelerates its transition toward decentralized power, the trackers that follow the sun will increasingly be powered by the algorithms and hardware engineered by Array Technologies. For the prudent investor, the BofA reiteration isn’t just a rating; it’s a confirmation of a fundamental industry shift.
