Daiwa Securities has upgraded Bloom Energy (BE.N) to Outperform from Hold, raising its price target sharply to $324 from $98, as the company capitalizes on soaring demand for power from artificial intelligence data centers. The upgrade follows a major deal with Nebius Group that could be worth up to $2.6 billion over ten years, reinforcing Wall Street's renewed focus on the fuel-cell maker.
Deal Details and Market Reaction
Bloom Energy and Nebius Group signed a master fuel-cell capacity agreement on May 14, under which Bloom will install, operate, and maintain power supply systems for Nebius. The deal calls for approximately 250 MW of guaranteed capacity, with the potential to scale up to 328 MW across three separate 10-year supply arrangements. Nebius could pay up to $2.6 billion in monthly service fees over the term, depending on conditions. Shares of Bloom traded at $314 in premarket action after closing at $302.49 on May 22. U.S. markets were closed Monday, May 25, for Memorial Day.
Why AI Power Demand Is Driving Growth
The surge in AI workloads has made power availability a critical bottleneck for data center expansion. Bloom's solid oxide fuel cells generate electricity on-site without combustion, reducing reliance on new transmission lines and enabling faster deployment. This behind-the-meter approach is increasingly attractive to AI infrastructure providers. Nebius infrastructure chief Andrey Korolenko emphasized that power remains a key constraint for AI infrastructure, while Bloom's Chief Commercial Officer Aman Joshi noted that AI workloads require power solutions capable of matching the scale of cloud platforms.
Financial Performance and Outlook
Bloom Energy's first-quarter results underscored its momentum. Revenue soared 130.4% year-over-year to $751.1 million, with product revenue jumping 208.4% to $653.3 million. The company raised its full-year 2026 revenue guidance to a range of $3.4 billion to $3.8 billion. Chief Executive K.R. Sridhar described Bloom as delivering “digital power for the digital age,” positioning the company as a go-to choice for on-site power. Chief Financial Officer Simon Edwards highlighted the company's technology and execution as key growth drivers.
Larger AI Power Deal and Industry Context
Bloom's Nebius deal follows an even larger agreement with Oracle. In April, Oracle announced that its Project Jupiter campus in New Mexico will use Bloom fuel cells for up to 2.45 GW of capacity, replacing gas turbines and diesel generators. The broader AI infrastructure market is expanding rapidly. Nebius, which Reuters categorizes as a neocloud provider alongside CoreWeave, reported first-quarter revenue up nearly eightfold year-over-year. The company boosted its capital expenditure outlook to $20-$25 billion, up from $16-$20 billion, and counts Meta Platforms and Microsoft among its customers. Nebius also secured a $2 billion investment from Nvidia.
Analyst Sentiment and Risks
Of the 25 analysts covering Bloom, nine rate it a strong buy, two a moderate buy, 13 a hold, and one a strong sell. The average price target stands at $250.27, below the current trading level. Daiwa's $324 target moves toward the higher end of estimates. However, execution risks remain. Nebius's filing notes that the agreement depends on certain start conditions, and Bloom's disclosures highlight technical and operational challenges in large power projects, funding requirements, and potential difficulty converting backlog as planned. Simply Wall St noted on May 24 that while the Nebius deal supports the growth narrative, it increases Bloom's exposure to delivery risk and the data-center cycle.
