Over the past year, AI infrastructure stocks have rapidly become one of the market’s most sought-after investment themes. As companies build massive data centers and AI factories, the need for reliable, clean, and scalable power has never been greater.
One company stepping into the spotlight is Bloom Energy (BE). The clean energy firm just signed a $5 billion partnership with Brookfield Asset Management (BAM) to supply power for Brookfield’s global network of AI factories.
Under the deal, Brookfield will invest up to $5 billion to use Bloom’s advanced fuel cell systems at multiple sites, including a major European project expected to be announced later this year.
This partnership gives Bloom a strong foothold in the fast-growing AI power market and a $5 billion reason investors are paying close attention to the stock right now.
Based in California, Bloom Energy designs and installs solid-oxide fuel cell systems that generate on-site power from natural gas, biogas, or hydrogen without combustion. Its Bloom Energy Server and Electrolyzer provide clean, reliable energy for data centers, utilities, and manufacturing sites. The company has deployed 1.4 gigawatts across 1,000 global locations, which shows its leadership in stationary fuel cell power generation.
Bloom’s stock has exploded this year amid the AI and energy infrastructure boom. The shares have climbed roughly 450% year-to-date (YTD), far outpacing the S&P 500 ($SPX). The rally was fueled by consecutive record quarters and big AI-related deals.
Following the robust rally, BE’s valuation has reached premium levels. Key metrics like price-to-sales (P/S) and price-to-book (P/B) are vastly higher than the sector median, indicating a very expensive stock. This suggests that BE might be overpriced compared to its peers.
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Artificial intelligence data centers, often called “AI factories,” are about to get a major power boost. Bloom Energy has announced a $5 billion partnership with Brookfield Asset Management to develop data centers powered by its advanced fuel cell systems. Following the announcement, Bloom’s shares surged more than 20% in a single day. The company’s on-site fuel cell systems deliver steady, scalable, and low-carbon energy, which is precisely what AI infrastructure needs as global demand accelerates.
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Brookfield, a global leader in infrastructure and renewable energy, views AI as a once-in-a-generation opportunity. The firm expects AI-related infrastructure spending to exceed $1 trillion this decade and reach $7 trillion within ten years. Its investment will fund the deployment of Bloom’s fuel cells at data centers worldwide, starting in Europe.
Both companies say traditional power grids can’t keep up with AI’s growing energy demands. Brookfield already operates more than 46 gigawatts of renewable capacity and has another 230 GW in development, giving it the scale to support this initiative. The collaboration positions both firms to capitalize on the surging demand for clean, dependable power capable of running AI systems at scale.
Bloom also plans to double its manufacturing capacity from 1 GW to 2 GW by the end of 2026, backed by a $100 million investment in its facilities, a move that underscores its confidence in long-term growth.
Bloom Energy posted another strong quarter on July 31, showing clear momentum in its business. Second-quarter revenue climbed 19.5% year-over-year (YoY) to $401.2 million, fueled by solid product and service sales of $351.1 million, up nearly 26% from last year.
Margins also improved sharply; gross margin expanded about six points to 26.7%, while the company’s net loss narrowed to $42.6 million, or –$0.8 per share, from a $61.7 million loss a year earlier.
That said, cash flow remains a weak spot. Operating cash flow came in at a loss of $213 million, driven by higher working capital needs, leaving free cash flow at a loss of $220 million. Bloom ended the quarter with about $575 million in cash and equivalents on its balance sheet.
CEO K.R. Sridhar said demand for Bloom’s on-site power systems has never been stronger, especially as AI-driven energy needs continue to surge.
Management reaffirmed its full-year outlook, guiding for $1.65 to $1.85 billion in revenue and $135 to $165 million in operating income. Analysts have been steadily raising their forecasts, now expecting Bloom to earn about $0.50 per share in 2025, nearly 80% higher than last year.
Wall Street’s divided on where Bloom Energy heads next.
Morgan Stanley has an “Overweight” rating and recently doubled its 12-month price target to $85, saying Bloom is fast becoming a go-to power source for AI data centers.
UBS is even more upbeat, hiking its target to $115 after the Brookfield deal. The firm sees Bloom’s swelling order backlog and growing exposure to clean energy infrastructure as signs of sustained momentum.
But Jefferies is taking the other side of that bet. The firm downgraded Bloom to “Underperform” and cut its target to $31, arguing BE stock already reflects years of aggressive growth that haven’t fully materialized yet.
Overall, Wall Street remains bullish but cautious, with a consensus rating of “Moderate Buy.” However, BE stock has already priced in much of the optimism, surpassing both its average and highest analyst targets, suggesting a potential pullback in the near term.
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On the date of publication, Nauman Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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