Shares of Daqo New Energy (NYSE:DQ) surged 5.05% in intraday trading on Tuesday, continuing its impressive run that has seen the stock climb nearly 30% over the past three months. The latest rally comes as analysts point to potential undervaluation and positive industry developments for the solar energy component manufacturer.

According to recent analysis, 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 undervaluation. This perceived value gap has likely contributed to increased investor interest in the company. Adding to the bullish sentiment, recent regulatory interventions by Chinese authorities are expected to stabilize polysilicon prices and improve industry profitability, potentially boosting Daqo's future revenue and margins.

While the solar sector has faced volatility, Daqo's recent performance suggests growing optimism about its growth prospects. 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, market participants will be closely watching for signs that confirm the company's improved positioning in the evolving solar energy landscape.