Bull of the Day: Bloom Energy (BE)

Bloom Energy (BE) is a leading manufacturer of solid-oxide fuel cell systems (SOFCs) that deliver on-site, clean electricity to enterprises globally, supporting Fortune 100 companies, hyperscale data centers, large utilities, manufacturers, and healthcare facilities.

The company's core product, the Bloom Energy Server, converts natural gas, biogas, or hydrogen into electricity without combustion, making it an efficient and environmentally friendly solution for distributed energy generation. This technology has positioned Bloom as a critical partner for data centers powering AI workloads and industries seeking energy resiliency and lower carbon footprints.

From large-scale grid connected primary power systems to smaller off-grid solutions, Bloom can tailor capacity even with the grid isn't ready or available. Not the least of its attributes, Bloom fuel cells can often be deployed and operating within 90 days.

The Oracle Prophecy

One year ago, Oracle (ORCL) CEO Larry Ellison said something shocking on his company's quarterly conference call: "We have 162 datacenters... we'd like to have 1,000 to 2,000 more."

A year later, he just delivered with a stunning $455 billion backlog in demand for Oracle Cloud Infrastructure services. ORCL shares jumped 30% on that news and Bloom Energy joined the rally because they had just been announced as a key provider of on-site energy systems for the datacenter builder.

While estimates have moved higher for Bloom, some analysts remain skeptical of how fast the company can grow citing only 15 to 50 megawatts of power demand from Oracle in the next year. Here was word from Jefferies a couple of weeks ago...

"BE's association with Oracle has sparked excitement, especially with OpenAI's Stargate project boosting ORCL's backlog... we estimate this deal could be in the 15–50 megawatt range — good, but not great."

Jefferies says BE's fuel cell delivery is fast, but infrastructure delays can slow deployment. The bank's new $31 PT reflects "mark to market of multiples and higher volume" but they have "no confidence in the volume estimates for 2027."

But last week, Bloom announced a new contract in Wyoming worth 900-MW as BFC Power advanced its plans to build a large facility in Laramie County, which would use BE fuel cells for continuous power.

See my video presentation on Bloom in this week's Top Stock Picks.

Bloom Growth Outlook

On the back of this news, analysts have barely budged their outlook. On Monday, Evercore ISI initiated coverage with a $100 price target. But UBS already held the high ground before the Wyoming deal with a Street high target of $105.

I think the analysts are behind the curve on this growth story. Given the rapid pace of new datacenter infrastructure plans announced by OpenAI, Tesla's (TSLA) xAI, and Meta Platforms (META), and the 2 to 4 year time frame for building new nuclear power facilities, it seems obvious that demand for Bloom Energy solutions will expand rapidly to meet the energy short-fall.

Even before the Wyoming deal, Bloom's topline consensus among four analysts was 20% growth to nearly $1.8 billion, with 2026 projected to advance 21% to cross $2 billion.

And the bottom line has been ramping this year as the company turns the screws of profitability. The 2025 EPS consensus calls for a 78% jump to 50-cents and next year sees another 50% advance to 75-cents.

Scaling Volume and Profits

Bloom's 2025 Q2 revenue reached $401.2 million, up 19.5% year-over-year, with product sales leading at $296.6 million (a 31% increase), and service revenue at $54.4 million. Gross margin expanded to 26.7% (non-GAAP: 28.2%), and the company posted a quarterly non-GAAP operating income of $28.6 million, marking sustained profitability in services. For full-year 2025, Bloom projects revenue between $1.65–$1.85 billion and a non-GAAP gross margin around 29%.

Major customers include Oracle (for AI data centers), Life Technologies, and numerous enterprises in manufacturing, healthcare, and retail aiming for 24x7 clean, resilient power generation.

With plenty of new customers in a rapidly expanding market, Bloom's fuel-flexible systems and growing partnerships in the digital and clean-energy sectors underpin its path for continued revenue growth and margin expansion.

Since their "clean energy" boxes can be deployed quickly (90 days), I imagine the company could have a growth trajectory like Generac during this massive build-out phase of the datacenter/AI revolution. Generac doubled sales in two years from late 2020 to $4.6 billion.

Bottom line: With a $20 billion market cap, Bloom Energy is trading about 10x sales vs. nuclear reactor provider Oklo (OKLO) which has no revenues projected until 2027. I think BE is in a superior position to grow and reward investors. I own it for Zacks TAZR Trader portfolio.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research