Shares of Daqo New Energy (NYSE: DQ) surged 5.04% in intraday trading on Tuesday, extending its impressive run that has seen the stock climb nearly 30% over the past three months. The latest rally is fueled by analyst reports suggesting potential undervaluation and positive developments in the solar energy industry.

Recent analysis indicates that Daqo New Energy's stock may be undervalued by as much as 3.9% based on consensus estimates, with some models suggesting an even more significant upside potential. The perceived fair value of $26.58, compared to its recent closing price of $25.55, has likely contributed to increased investor interest in the company. This valuation gap, coupled with the stock's strong recent performance, appears to be driving the current bullish sentiment.

Adding to the optimistic outlook, recent regulatory interventions by Chinese authorities are expected to benefit companies like Daqo New Energy. These measures aim to curb irrational competition and enforce sales above production costs, potentially stabilizing polysilicon prices and improving industry profitability. As a result, market participants anticipate potential boosts to Daqo's future revenue and margins. However, investors should remain cautious, as persistent industry oversupply and the company's history of operating losses could pose risks to the current upbeat outlook. As Daqo prepares to release its Q3 2025 financial results on October 27, the market will be closely watching for confirmation of the company's improved positioning in the evolving solar energy landscape.