Bloom Energy Stock Surges 21%. What’s Driving the Rise.

Bloom Energy stock has already nearly quadrupled this year, as of Friday’s close. (Dreamstime)

Key Points

• Bloom Energy shares surged after a $5 billion partnership with Brookfield Asset Management for AI factories.
• Bloom Energy will be the preferred power provider for Brookfield’s AI factories.
• Bloom Energy manufactures fuel cells that convert natural gas or hydrogen into electricity.

Bloom Energy shares were surging early on Monday after the company agreed to a $5 billion partnership with Brookfield Asset Management to construct factories to supply compute and energy for artificial intelligence.

Bloom Energy shares were up 21% at $105.00 in early trading. The company, which makes fuel cells that turn natural gas or hydrogen into electricity, will be the preferred power provider for Brookfield’s AI factories.

Brookfield will invest up to $5 billion to deploy Bloom’s fuel-cell technology. The two companies are collaborating on the design and delivery of AI factories globally, including a site in Europe that will be announced before the end of the year, the companies said.

“This partnership marks the first investment by Brookfield through its dedicated AI Infrastructure strategy and further validates Bloom’s ability to be a key player in the power infrastructure build-out to support AI,” wrote Evercore analyst Nicholas Amicucci in a research note.

Amicucci raised his target price on Bloom Energy stock to $137 from $100 and kept an Outperform rating. The new target price is based on a enterprise value-to-earnings multiple of 37.5 times his forecast adjusted earnings for Bloom Energy in 2028.

The stock has already nearly quadrupled this year, as of Friday’s close, with Bloom Energy having struck deals with companies including Oracle and American Electric Power to help power the data centers behind the AI boom.

Bloom Energy’s soaring stock price recently led analysts at Jefferies to lower their rating on the stock, warning that it could be “overextended,” and it needed to start recording significant data-center orders to justify its valuation.

The deal with Brookfield looks like a good start.

Write to Adam Clark at adam.clark@barrons.com