Bloom Energy Slides 6% on Delay Fears, Splitting Fuel Cell Trade
The unified fuel-cell trade on AI data center demand fractured on Monday as Bloom Energy dropped 6% on analyst warnings over project delays while FuelCell Energy gained 6%, highlighting growing investor selectivity over high valuations.
Shares of Bloom Energy fell 6% to $202.92 on Monday morning, diverging sharply from peer FuelCell Energy, which surged 6% to $19.63. Another sector peer, Plug Power, also declined, slipping 2% to $2.13. This abrupt divergence breaks a recent market pattern where the three stocks, all tied to the broader AI data center power generation thesis, had previously moved in lockstep.
Bloom Energy’s specific decline followed a cautious morning note from TD Cowen, which reiterated a Hold rating alongside a $235 price target. The firm warned that major data center projects spearheaded by Oracle and American Electric Power are facing significant timeline delays. TD Cowen cautioned that these specific setbacks threaten to undermine Bloom Energy's financial estimates for 2027 and 2028, creating near-term uncertainty.
These fundamental concerns are hitting a stock that is already priced for perfection. TD Cowen highlighted that Bloom Energy currently trades at a price-to-earnings ratio of 514 times and a price-to-book ratio of 66 times. This severe valuation overhang is further compounded by a July 8 short report from Hunterbrook, titled "Bloom's Big Lie," which alleged the company conceals a deep dependence on China for its scandium supply chain.
Bloom Energy has forcefully pushed back against the short seller's narrative. In a formal 8-K filing, the company categorically rejected the allegations, labeling them "false and misleading." Management characterized the Hunterbrook report as an opportunistic attack designed to capitalize on a stock that has already rallied 133% year to date.
Despite these headwinds, several other Wall Street desks remain highly constructive on the name. Baird maintained an Outperform rating with a $310 target, UBS reiterated a Buy rating at $350, and RBC held its Outperform stance with a $335 target. These bulls point to Bloom Energy's recent profitable quarter, which delivered $0.23 in earnings per share.
However, Monday's trading action signals that the broader market is no longer willing to treat fuel-cell stocks as a uniform bet on artificial intelligence power demand. With Bloom Energy's premium multiple leaving virtually no room for execution errors, investors are differentiating between winners and laggards. FuelCell Energy, up 167% year to date, is capturing the AI momentum, while fundamentally weaker names like Plug Power, up just 7% this year, continue to lag.
