What Happened?

Shares of electricity storage and software provider Fluence (NASDAQ: FLNC) jumped 5.5% in the afternoon session after the company was selected by VERBUND, a major European electricity producer, to build two large-scale battery-based storage systems in Germany. 

The projects will have a combined output of over 92 megawatts (MW) and a storage capacity of 186 megawatt-hours (MWh). These battery energy storage systems are designed to help stabilize the German electricity grid by balancing fluctuations from renewable energy sources like wind and solar. The deal reinforces Fluence's position in the growing European energy storage market. 

For VERBUND, the projects are a significant step toward its goal of installing 1 gigawatt of storage capacity by 2030. This news provides a positive catalyst for Fluence, which has faced a challenging market and a recent stock downgrade from Mizuho, although the firm did raise its price target.

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What Is The Market Telling Us

Fluence Energy’s shares are extremely volatile and have had 63 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 1 day ago when the stock dropped 3.2% on the news that analysts at Mizuho downgraded the stock. The investment bank lowered its rating on the energy storage provider to "Neutral" from "Outperform." The downgrade comes in response to President Trump's "One Big Beautiful Bill," which alters the landscape for federal energy subsidies. Mizuho analysts noted that the new policy could limit short-term demand for utility-scale solar developers. Despite the downgrade, Mizuho significantly raised its price target on Fluence to $10.00 from $6.00, citing the company's strong domestic production and supply of non-China battery cells. However, the bank believes this advantage is now reflected in the stock's price and anticipates increased domestic competition within the next one to two years.

Fluence Energy is down 50.5% since the beginning of the year, and at $8.38 per share, it is trading 64.4% below its 52-week high of $23.50 from November 2024. Investors who bought $1,000 worth of Fluence Energy’s shares at the IPO in October 2021 would now be looking at an investment worth $239.29.

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