diff --git a/compiler/packages/babel-plugin-react-forget/src/HIR/BuildHIR.ts b/compiler/packages/babel-plugin-react-forget/src/HIR/BuildHIR.ts
index d16ac9cc8c..9425030dac 100644
--- a/compiler/packages/babel-plugin-react-forget/src/HIR/BuildHIR.ts
+++ b/compiler/packages/babel-plugin-react-forget/src/HIR/BuildHIR.ts
@@ -2916,8 +2916,9 @@ function lowerJsxElementName(
   if (exprPath.isJSXIdentifier()) {
     const tag: string = exprPath.node.name;
     if (tag.match(/^[A-Z]/)) {
+      const kind = getLoadKind(builder, exprPath);
       return lowerValueToTemporary(builder, {
-        kind: "LoadLocal",
+        kind: kind,
         place: lowerIdentifier(builder, exprPath),
         loc: exprLoc,
       });
@@ -3245,7 +3246,7 @@ function getStoreKind(
 
 function getLoadKind(
   builder: HIRBuilder,
-  identifier: NodePath<t.Identifier>
+  identifier: NodePath<t.Identifier | t.JSXIdentifier>
 ): "LoadLocal" | "LoadContext" {
   const isContext = builder.isContextIdentifier(identifier);
   return isContext ? "LoadContext" : "LoadLocal";
diff --git a/compiler/packages/babel-plugin-react-forget/src/HIR/HIRBuilder.ts b/compiler/packages/babel-plugin-react-forget/src/HIR/HIRBuilder.ts
index ce12a46a4a..1246a68c82 100644
--- a/compiler/packages/babel-plugin-react-forget/src/HIR/HIRBuilder.ts
+++ b/compiler/packages/babel-plugin-react-forget/src/HIR/HIRBuilder.ts
@@ -267,7 +267,7 @@ export default class HIRBuilder {
     return resolvedBinding;
   }
 
-  isContextIdentifier(path: NodePath<t.Identifier>): boolean {
+  isContextIdentifier(path: NodePath<t.Identifier | t.JSXIdentifier>): boolean {
     const binding = this.#resolveBabelBinding(path);
     if (binding) {
       return this.#env.isContextIdentifier(binding.identifier);
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.expect.md
new file mode 100644
index 0000000000..82c48f2108
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.expect.md
@@ -0,0 +1,64 @@
+
+## Input
+
+```javascript
+import { useMemo } from "react";
+import { Stringify } from "shared-runtime";
+
+function Component(props) {
+  let Component = Stringify;
+
+  Component = useMemo(() => {
+    return Component;
+  });
+
+  return <Component {...props} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ name: "Sathya" }],
+};
+
+```
+
+## Code
+
+```javascript
+import { useMemo, unstable_useMemoCache as useMemoCache } from "react";
+import { Stringify } from "shared-runtime";
+
+function Component(props) {
+  const $ = useMemoCache(3);
+  let Component;
+  if ($[0] === Symbol.for("react.memo_cache_sentinel")) {
+    Component = Stringify;
+
+    Component;
+    let t0;
+    t0 = Component;
+    Component = t0;
+    $[0] = Component;
+  } else {
+    Component = $[0];
+  }
+  let t0;
+  if ($[1] !== props) {
+    t0 = <Component {...props} />;
+    $[1] = props;
+    $[2] = t0;
+  } else {
+    t0 = $[2];
+  }
+  return t0;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ name: "Sathya" }],
+};
+
+```
+      
+### Eval output
+(kind: ok) <div>{"name":"Sathya"}</div>
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.js
new file mode 100644
index 0000000000..7abf87ea0f
--- /dev/null
+++ b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/context-variable-as-jsx-element-tag.js
@@ -0,0 +1,17 @@
+import { useMemo } from "react";
+import { Stringify } from "shared-runtime";
+
+function Component(props) {
+  let Component = Stringify;
+
+  Component = useMemo(() => {
+    return Component;
+  });
+
+  return <Component {...props} />;
+}
+
+export const FIXTURE_ENTRYPOINT = {
+  fn: Component,
+  params: [{ name: "Sathya" }],
+};
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.expect.md b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.expect.md
deleted file mode 100644
index 69a7bf2c1e..0000000000
--- a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.expect.md
+++ /dev/null
@@ -1,29 +0,0 @@
-
-## Input
-
-```javascript
-function Component(props) {
-  let Component = Foo;
-
-  Component = useMemo(() => {
-    return Component;
-  });
-
-  return <Component />;
-}
-
-```
-
-
-## Error
-
-```
-   6 |   });
-   7 |
->  8 |   return <Component />;
-     |           ^^^^^^^^^ [ReactForget] Invariant: Expected all references to a variable to be consistently local or context references. Identifier <unknown> Component$2 is referenced as a local variable, but was previously referenced as a context variable (8:8)
-   9 | }
-  10 |
-```
-          
-      
\ No newline at end of file
diff --git a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.js b/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.js
deleted file mode 100644
index 355d85f235..0000000000
--- a/compiler/packages/babel-plugin-react-forget/src/__tests__/fixtures/compiler/error.todo-context-variable-as-jsx-element-tag.js
+++ /dev/null
@@ -1,9 +0,0 @@
-function Component(props) {
-  let Component = Foo;
-
-  Component = useMemo(() => {
-    return Component;
-  });
-
-  return <Component />;
-}