Bloom Energy’s Soaring Valuation: Can the AI Data Center Boom Justify the Price?

Bloom Energy US0937121079

Bloom Energy's stock is experiencing a meteoric rise, propelled by a series of major contracts linked to powering artificial intelligence data centers. The fuel cell specialist has recently reached unprecedented share price levels. While the narrative of capitalizing on the AI expansion is compelling, it raises a critical question for investors: how sustainable is the company's current, extreme market valuation?

The company's operational foundation has strengthened significantly. Bloom Energy now has approximately 1.4 gigawatts of its Energy Server systems installed worldwide. Its financial results for the third quarter of 2025 demonstrated a sharp acceleration: revenue surged 57% year-over-year to $519 million. The company turned a net loss of $9.7 million from the same period last year into a net profit of $7.8 million.

Wall Street forecasts revenue of around $1.9 billion for the full year 2025, with projections for 2026 climbing to $2.46 billion. Earnings expectations have been ratcheted up dramatically. Analysts anticipate fourth-quarter 2025 earnings per share (EPS) of $0.15. For the 2026 fiscal year, estimates sit at $0.47 per share, which would represent a staggering year-on-year profit jump of roughly 683%.

The Catalysts: Mega-Deals and Strategic Partnerships

A recent, massive order has been the primary catalyst for the latest rally. American Electric Power's (AEP) non-regulated division exercised an option to purchase an additional 900 megawatts of Bloom's solid-oxide fuel cells for $2.65 billion. This is in addition to an initial 100-megawatt agreement established in 2024.

This supply contract is tied to a data center project in Wyoming, backed by a 20-year power purchase agreement with a high-credit-quality customer. Analysts at Morgan Stanley estimate this single project could generate approximately $3 billion in revenue for Bloom in the coming years.

Beyond this deal, strategic moves help explain the market's enthusiasm. Bloom has established a $5 billion framework agreement with Brookfield Asset Management to equip AI data centers. The company also secured a $600 million credit facility with Wells Fargo, announced in late December 2025. CEO K.R. Sridhar recently described Bloom as the "preferred onsite provider" for Brookfield's trillion-dollar infrastructure portfolio.

Extreme Market Metrics and Technical Indicators

The powerful rally has pushed the stock's technical indicators into rare territory and amplified its volatility:

• 30-day performance: +128%
• Distance from 200-day moving average: approximately +150%
• 14-day Relative Strength Index (RSI): 92.1
• Annualized 30-day volatility: nearly 96%

Trading well above its common moving averages, the stock has shown a highly volatile trajectory. Over the past twelve months, it has experienced 76 trading sessions with price movements exceeding five percent.

The Valuation Divide Among Analysts

The valuation picture reveals a stark divide. Some firms have raised their price targets citing the momentum from recent contracts:

• Susquehanna maintains a "Buy" rating with a $157 target.
• Evercore ISI holds an "Outperform" rating with a $152 target, calling Bloom a favorite for rapid clean energy deployment.
• Clear Street increased its target from $58 to $68 but kept a "Hold" recommendation.

However, the broader analyst consensus remains cautious. The average price target among 22 covering analysts is $106.20, roughly a quarter below the current trading level. Skeptical voices persist: Jefferies maintains a $53 target, while Bank of America, despite raising its target from $26 to $39, sustains an "Underperform" rating. BofA warns the market is effectively pricing in "five years of perfection."

Valuation ratios underscore this skepticism. Based on expected earnings, the stock trades at a forward price-to-earnings (P/E) ratio exceeding 200. Its price-to-sales (P/S) ratio stands at 18.1, far above the electrical industry average of approximately 2.17.

The Crucial Test Ahead

All eyes are on Bloom Energy's upcoming fourth-quarter 2025 results, scheduled for release on February 26. This report will serve as a critical test of whether the company's sales momentum, margin development, and forward guidance can align with the elevated market expectations. Given the extreme valuation, any deviation from forecasts—whether positive or negative—is likely to trigger a pronounced reaction in the share price, putting the sustainability of the current rally to the test.