Why Did Bloom Energy Stock Rocket Higher Today?
Key Points
AI infrastructure partnerships will keep Bloom's business thriving.
Yesterday's stock action looks like it was a gift for investors.
It's still not too late to own Bloom if the AI buildout continues.
Bloom Energy (NYSE: BE) announced earnings Tuesday, but apparently it took a day for the news to sink in with investors. The market was focused on the Federal Reserve decision and concerns about the tech sector yesterday, leading to declines in many artificial intelligence (AI) names.
Bloom was one of them, despite a stellar earnings report. That reversed in a big way today, though. Bloom stock rocketed over 30% in early trading, and remained up by 26.6% as of 11:57 a.m. ET.
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Is it too late to buy Bloom Energy?
Bloom management made it clear that business is booming and there's no end in sight. Hyperscalers and other data center operators are clamoring for power solutions, and Bloom has a good fit with its fuel cell systems.
The company recorded over $1 billion in sales for the first time in Q2, with revenue soaring 166% year over year. Bloom Energy founder and CEO K.R. Sridhar summed up the current environment this way:
The demand for Bloom Energy's solutions keeps accelerating every quarter as customers who traditionally defaulted to combustion technologies are now proactively choosing Bloom as a superior power solution. Today, all the major U.S. hyperscalers and over a dozen U.S. neoclouds, AI labs, and colocation data center operators have validated and approved our power solutions for their AI factories. Bloom is now a standard for AI onsite power.
It raised full-year guidance and now sees about $4 billion in revenue in 2026. With today's big jump higher, that implies a price-to-sales (P/S) ratio of about 14.5. While that's pretty expensive, if business continues to thrive through 2027 and beyond, it's really not an excessive valuation.
Investors who believe the AI infrastructure story is still in the early innings should include Bloom in diversified portfolios even after today's big jump.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.