Bloom Energy (NYSE:BE) shares continued their upward momentum on Monday, trading near record highs following a 15% rally last week fueled by investor enthusiasm for AI data center power solutions. The stock reached $337.49, off an earlier high of $349.75, but remained above last week's record territory.
The rally reflects growing recognition that electricity supply is becoming a critical bottleneck for AI infrastructure expansion. A recent Bloom survey found that 61% of AI data center builders plan to secure their own power if grid capacity proves insufficient. This trend is driving demand for on-site power generation systems like Bloom's solid oxide fuel cells, which produce electricity through electrochemical reactions rather than combustion.
Strong Financial Performance
Bloom's first-quarter results provided concrete evidence of accelerating demand. Revenue jumped 130.4% year-over-year to $751.1 million, with product revenue surging 208.4%. The company raised its 2026 revenue outlook to a range of $3.4 billion to $3.8 billion, and now expects non-GAAP operating income between $600 million and $750 million. CEO KR Sridhar characterized Bloom as a "go-to choice" for on-site power solutions.
Key Customer Deals
Oracle (NYSE:ORCL) remains Bloom's most significant customer. Reuters reported in April that Bloom will deliver up to 2.8 GW of fuel-cell capacity to Oracle, with 1.2 GW already under contract and initial deployments underway. Oracle and BorderPlex plan to use Bloom fuel cells exclusively for Project Jupiter, their AI data center campus in New Mexico, which could require up to 2.45 GW of capacity. The companies estimate nitrogen-oxide emissions will drop by approximately 92% compared to earlier gas turbine and diesel generator plans.
Nebius, an AI cloud computing provider, announced in May it will use Bloom fuel cells for 328 megawatts of installed power, expected online this year. The systems will deliver "behind-the-meter" electricity, produced on the customer's side of the utility connection. "Power remains a key constraint," said Nebius chief product and infrastructure officer Andrey Korolenko.
Market Dynamics
The broader energy landscape is shifting as major players pursue similar strategies. Chevron (NYSE:CVX) signed an agreement with Microsoft (NYSE:MSFT) to build a co-located natural gas power plant for a West Texas data center, with first power expected in 2028 and eventual capacity of 2.67 GW. This underscores the intense competition for reliable power sources among technology companies.
Bloom faces competition from other fuel-cell companies like Plug Power (NASDAQ:PLUG) and FuelCell Energy (NASDAQ:FCEL), as well as backup-power plays like Generac (NYSE:GNRC). However, analysts at 24/7 Wall St. noted Bloom is outpacing both on 2026 share gains and business trends.
Valuation and Risks
Despite the positive momentum, the stock's elevated valuation raises concerns. Simply Wall St. estimated fair value at $263.65, well below the recent close of $328.91. The company's reliance on natural gas and potential project delays represent key risks. Additionally, Bloom's net margin of just 0.2% highlights funding risks from external borrowing.
The market is essentially paying a premium for scarcity—specifically, permitted, modular power solutions located near points of use. If Bloom successfully converts its announced megawatts into steady service revenue on schedule, the current valuation may be justified. However, any delays or faster rollouts by competitors using gas turbines or generators could erode that scarcity premium quickly.
