What Happened?
Shares of electricity generation and hydrogen production company Bloom Energy (NYSE: BE) jumped 6.5% in the morning session after Morgan Stanley significantly raised its price target on the company, citing its growing potential in the AI data center market.
The analyst, David Arcaro, increased the price target to a Street-high of $85 from $44 while maintaining an "Overweight" rating. The bullish outlook is directly linked to Bloom's partnership with Oracle, which the fuel cell company will supply with power for its AI data centers. The move follows Oracle's recent announcement of massive bookings that exceeded expectations, signaling a "massive inflection in demand." This surge in Oracle's business reinforces the significant opportunity for Bloom Energy to capitalize on the power needs of the rapidly expanding AI sector.
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What Is The Market Telling Us
Bloom Energy’s shares are extremely volatile and have had 65 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 4 days ago when the stock dropped 5.5% on the news that it received positive commentary from Wall Street analysts, suggesting a possible pullback after a significant rally.
The decline occurred even as Baird raised its price target on the stock to $61 and BMO Capital increased its target to $75, with both firms maintaining an "Outperform" rating. The stock's performance was exceptionally strong, surging over 450% in the past year, which may have prompted some investors to take profits. Baird analysts also noted the stock has a relatively high beta of 3.4, indicating higher volatility, which can contribute to sharp daily price swings like the one seen today.
Bloom Energy is up 209% since the beginning of the year, and at $72.17 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 $4,840.
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