AI boom fuels unexpected growth for Bloom Energy

According to a recent analysis, the stock has a 24/7 Wall St. price target of $195.42 over the next 12 months, representing a potential 10.95% increase from its current price of $176.13. The model currently rates the stock a buy with a 90% confidence level, although this target is below the Wall Street consensus of $284.88, reflecting the stock’s volatility (beta of 3.618).

Despite a recent 40.45% monthly decline and a 20.76% drop in the last week, Bloom Energy’s stock is still up 102.72% year-to-date. The sell-off followed a record earnings report, where investors took profits after previously high expectations were met.

In the third quarter, revenue reached $1.24 billion, surpassing the $1.07 billion consensus estimate and marking a 138.1% increase compared to the previous year. Non-GAAP EPS of $0.94 also exceeded expectations of $0.67. Bloom Energy has now raised its full-year revenue outlook for the third time, projecting between $4.4 billion and $4.6 billion, with non-GAAP EPS ranging from $3.10 to $3.40. Chief executive K.R. Sridhar noted, “Hyperscalers have been the first to embrace on-site power. They need power rapidly and at large scale.”

Analysts predict that orders for gigawatts of power could further boost Bloom’s stock, potentially reaching $294.21 in a bullish scenario. The company’s ability to rapidly deploy power, such as delivering power to Oracle’s Utah site in under two months, is a key selling point. American Electric Power is planning 700 megawatts of carbon-capture-enabled Bloom servers to supply Google. Bloom’s production capacity currently exceeds five gigawatts annually, and demand is expected to continue growing, especially as data centers are projected to consume between 6.7% and 12% of U.S. electricity by 2028.

While the stock currently trades at a high valuation of 102x trailing earnings, and a fourth-quarter delivery timeline remains a factor, the recent price drop has reduced some of the valuation risk. The company’s free cash flow was a use of $181 million last quarter, although year-to-date free cash flow remains positive at $42 million, with $2.5 billion in cash reserves. Comparisons to Vertiv (NYSE:VRT) and Plug Power (NASDAQ:PLUG) highlight Bloom’s superior growth rate, despite its higher forward P/E ratio.

Projections from 24/7 Wall St. estimate a potential price range of $174.95 in 2026 to $251.40 in 2030, contingent on continued execution of the current strategy and market conditions.