Bloom Energy Corporation (BE), a leading provider of solid oxide fuel cell systems, has secured a massive $1.7 billion deal for fuel cell technology to power artificial intelligence (AI) cloud infrastructure. The deal, announced recently, has significant implications for investors optimistic about clean energy powering AI data centers.
Under the agreement, IDF and Oaktree Capital are committing the $1.7 billion to Bloom to provide meter power solutions for the AI operations of Nebius Group N.V. (NBIS). This deal highlights the growing demand for clean energy solutions in the AI sector and positions Bloom Energy as a key player in this emerging market.
However, despite the promising news, investors did not react positively to the announcement. The stock dropped 13.64% intraday on July 16, as the market reacted to some other news surrounding Bloom Energy. The company’s stock has come under pressure after a short report questioned its sourcing of Chinese scandium. The Hunterbrook report alleges that Bloom secretly relies on China for scandium, thereby putting its supply chain at risk.
Investors have also noted some insider selling activity in the company’s stock. While Bloom might be on the beneficiary side of an AI infrastructure boom, there are some concerns surrounding it at the moment. We take a closer look at the company’s activities, its emergence as a high-beta ‘AI power’ proxy, and the analyst consensus on its stock.
Bloom Energy develops and supplies solid oxide fuel cell solutions that generate on-site electricity and support nascent hydrogen use cases for customers. Its systems deliver distributed, lower-carbon power to AI data centers, semiconductor manufacturers, utilities, and a broad range of commercial and industrial facilities that need reliable, modular energy infrastructure.
The company’s activities include designing, producing, installing, and servicing its fuel cell platforms, with core operations in the United States and an expanding presence abroad. Bloom Energy maintains its corporate headquarters in San Jose, California and has a market capitalization of $58.80 billion.
Bloom Energy’s huge move reflects its emergence as a high-beta ‘AI power’ proxy, as investors price in soaring demand for on-site fuel-cell power from AI and cloud data centers. Over the past 52 weeks, Bloom’s stock has gained a whopping 784.3%, while it is up 147.4% year-to-date (YTD). The company’s shares reached a 52-week high of $351.28 on June 25 but are down 38.6% from that level, having declined 24.6% over the past month.
On a forward-adjusted basis, Bloom’s price-to-earnings (non-GAAP) ratio of 95.59 times is stretched compared to the industry average of 21.42 times. Street analysts are robustly optimistic about Bloom’s bottom-line trajectory. For the current fiscal year, EPS is projected to surge considerably annually to $1.43, followed by a 160.1% increase to $3.72 in the next fiscal year.
Clear Street analyst Tim Moore reaffirmed a ‘Hold’ rating on Bloom Energy’s stock and assigned a $290 price target. Moore noted that the company’s shares have come under pressure as AI chip stocks have experienced a sell-off since mid-June. Also, the analyst highlighted the recent scandium report.
Truist analyst Christopher Souther initiated with a ‘Hold’ rating and a $250 price target, pointing toward the company’s AI-driven surge but also recommending waiting for the stock’s value to normalize. Susquehanna analysts kept a ‘Positive’ rating on Bloom Energy’s stock and raised the price target from $293 to $298.
Baird analysts reiterated an ‘Outperform’ rating on Bloom Energy’s stock and a $310 price target despite the scandium short report. Analysts noted that the report recycled multiple bear arguments. Wall Street analysts are still taking a positive stance on Bloom’s stock now, with a consensus ‘Moderate Buy’ rating overall.
