Daqo New Energy (NYSE: DQ) stock continued its upward trajectory, soaring 5.07% in pre-market trading on Wednesday. This surge follows Tuesday's impressive 5.04% gain during intraday trading, extending the stock's remarkable run that has seen it climb nearly 30% over the past three months. The latest rally is fueled by a combination of factors, including 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 valuation models suggesting even greater upside potential. The perceived fair value of $26.58, compared to its recent closing price, has likely contributed to increased investor interest. Additionally, regulatory interventions by Chinese authorities are expected to benefit companies like Daqo by stabilizing polysilicon prices and improving industry profitability. These measures aim to curb irrational competition and enforce sales above production costs, potentially boosting Daqo's future revenue and margins.

While the current sentiment remains bullish, investors should exercise caution due to persistent industry oversupply and the company's history of operating losses. Market participants will be closely watching Daqo's upcoming Q3 2025 financial results, scheduled for release on October 27, for further confirmation of the company's improved positioning in the evolving solar energy landscape. The continued stock surge suggests growing optimism about Daqo's growth prospects, but the upcoming earnings report will be crucial in validating this positive outlook.