Bloom Energy Corporation (NYSE:BE) experienced a sharp decline on Friday, with shares falling 14.9% to close at $184.89. The drop, which contributed to a weekly loss of 14%, comes as the company faces mounting scrutiny over its ability to achieve ambitious revenue targets for 2026. Despite a strong start to the week with a 14.8% surge on Tuesday, the stock has now retreated 47.4% from its June peak of $351.28.
Early projections for the second quarter, which ended June 30, indicate sequential revenue growth of just 2.1%. According to Zacks forecasts, Bloom Energy is expected to report Q2 revenue of $766.88 million. This modest growth has raised questions about the company's capacity to hit the midpoint of its 2026 guidance, which calls for approximately $1.04 billion per quarter in the second half of the year.
To meet the $3.6 billion midpoint of its annual revenue guidance, Bloom Energy must generate $2.08 billion in the second half, or about $1.04 billion each quarter. This represents a 35.7% increase over the Q2 forecast. The company's low-end guidance of $3.4 billion would require $941 million per quarter in H2, a 22.7% jump, while the high-end of $3.8 billion would need $1.141 billion per quarter, a 48.8% increase.
The spotlight now turns to management's delivery schedule for the second half. Major contracts, including a significant agreement with Oracle (NYSE:ORCL) for up to 2.8 gigawatts in fuel-cell capacity, must be executed and reflected as booked revenue. The first phase of the Oracle deal, involving 1.2 gigawatts, has already been contracted and is currently in deployment. Additionally, Brookfield Asset Management (NYSE:BAM) extended its project-financing deal with Bloom to $25 billion in April, providing a substantial financial backbone.
Bloom Energy posted a solid first quarter, with revenue climbing 130.4% to $751.1 million, driven by product growth of 208.4%. Non-GAAP gross margin came in at 31.5%, and operating cash flow totaled $73.6 million. In April, the company raised its 2026 outlook, projecting revenue between $3.4 billion and $3.8 billion, with a non-GAAP gross margin near 34% and adjusted EPS in the range of $1.85 to $2.25.
Chief Executive K.R. Sridhar has expressed confidence, stating that Bloom is "rapidly becoming the standard and 'go-to choice' for on-site power." However, investors will be watching closely when the company reports its Q2 results after the market closes on Tuesday. A conference call is scheduled for 5 p.m. EDT, with early projections pointing to adjusted earnings of 39 cents per share.
The broader fuel-cell sector also faced headwinds on Friday. FuelCell Energy (NASDAQ:FCEL) slid 8.8%, and Plug Power (NASDAQ:PLUG) slipped 4.6%. The S&P 500 posted a slight gain, while the Nasdaq decreased by 0.6%, reflecting a mixed market environment.
Risks are balanced on both sides. The scheduling of projects can move sales from one quarter to another, and a high sales multiple could amplify any reduction in guidance. Conversely, accelerated deployments might cause present estimates to appear cautious. The central event of the week takes place on Tuesday evening, where a Q2 outperformance would be beneficial, but maintaining guidance hinges on providing a convincing roadmap for the second half.
