What Happened?
Shares of electricity generation and hydrogen production company Bloom Energy (NYSE: BE) jumped 28.7% in the afternoon session after it announced a $5 billion strategic partnership with Brookfield Asset Management to develop infrastructure for Artificial Intelligence (AI).
Under the agreement, Bloom became the preferred provider of onsite power for Brookfield's global "AI factories." The deal involved Brookfield investing up to $5 billion to deploy Bloom's fuel cell technology, which provides reliable and scalable power that can be set up quickly without depending on traditional power grids. This capability is critical as AI computing demands massive amounts of energy that legacy grids often struggle to supply. The companies were already collaborating on AI factory projects, including a European site that was expected to be announced before the year's end. The news was met with optimism from analysts, with Susquehanna, for example, maintaining a "Positive" rating and significantly raising its price target on the stock.
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What Is The Market Telling Us
Bloom Energy’s shares are extremely volatile and have had 68 moves greater than 5% over the last year. But moves this big are rare even for Bloom Energy and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped on the news that Evercore ISI Group initiated coverage on the company with an "Outperform" rating and set a price target of $100.
The new rating from the financial firm pointed to Bloom Energy's strong position to meet growing power demands with its versatile and efficient fuel-agnostic servers. The analyst noted the company gained significant traction with utilities and leading AI companies, which are key to its growth. This positive view echoed recent comments from JPMorgan, which maintained its “Overweight” rating on the stock and raised its price target to $90. JPMorgan also highlighted the rising demand for onsite power from data centers as a key factor, suggesting that risks were skewed to the upside if Bloom secured more orders.
Bloom Energy is up 374% since the beginning of the year, and at $110.74 per share, has set a new 52-week high. Investors who bought $1,000 worth of Bloom Energy’s shares 5 years ago would now be looking at an investment worth $5,229.
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