Bloom Energy's 500% Run Hits a Rare Earth Speed Bump

Bloom Energy posts first billion-dollar quarter with 165% revenue growth, but shares slide 38% from highs amid legal dispute over Chinese rare earth supplies.

The fuel-cell maker's stock has become a study in contradiction. Bloom Energy just posted the strongest quarter in its history, with revenue crossing the billion-dollar mark for the first time — yet the shares keep sliding, and a legal dispute over Chinese rare earth supplies now shadows the company's AI-powered growth story.

The stock closed Friday at €189.60, down 4.63 percent on the day and roughly 38.54 percent below its 52-week high of €308.50, reached in late June. For investors who bought in during the spring, the retreat has been painful. But zoom out, and the picture changes dramatically: the shares are still up 152.63 percent year-to-date and a staggering 500.19 percent over the past twelve months. The current consolidation looks less like a structural break than a digestion pause after a ferocious rally.

A Billion-Dollar Quarter, Finally

The numbers Bloom Energy reported on July 28 were, by any measure, exceptional. Second-quarter revenue hit $1.065 billion — up 165.5 percent year-over-year and the first time the company has breached the billion-dollar mark in a single quarter. Product revenue alone surged 215.4 percent. Gross margin expanded to 33.4 percent, a gain of 668 basis points. Operating income swung from a $3.5 million loss a year earlier to a $182.2 million profit, while earnings per share jumped from a loss of $0.18 to a gain of $0.62. Net income came in at $196.3 million, versus a loss in the prior-year period.

Management raised its full-year 2026 revenue guidance to a range of $3.9 billion to $4.2 billion, which at the midpoint implies roughly 100 percent growth. The company also guided to non-GAAP operating income of $800 million to $900 million for the year. The driver, as Bloom Energy tells it, is surging demand from hyperscalers, AI labs, and colocation providers that are turning to on-site power generation as grid interconnection delays mount.

The momentum is visible in the company's AI infrastructure business, which now counts nearly two dozen customers with roughly 250 megawatts of contracted capacity. On August 6, Bloom expanded its partnership with MiTAC Computing Technology, a subsidiary of Taiwan's MiTAC Holdings, to operate an island-capable microgrid of fuel cells at the manufacturer's AI server campus in Fremont, California — an extension of an existing installation in San Jose.

Wall Street Can't Agree

The analyst response to the record quarter has been strikingly divided. Evercore ISI's Nicholas Amicucci reaffirmed an Outperform rating and a $350 price target on Friday, citing the MiTAC deal and Bloom's position along the growing AI supply chain. Mizuho Securities upgraded the stock from Neutral to Outperform in late July, though it cut its price target to $242 from $285, with analyst Maheep Mandloi pointing to stronger-than-expected execution and accelerating margin expansion that made the recent pullback an attractive entry point. The stock jumped 27 percent on that call.

Others have moved in the opposite direction. Wells Fargo slashed its target to $176 from $217, holding an Equal Weight rating. Truist trimmed to $218 from $250 with a Hold. Jefferies cut to $188 from $246. The resulting target range — from $176 to $350 — reflects genuine uncertainty about whether the growth rate is sustainable and how the legal risk should factor into the valuation.

The Scandium Problem

That legal risk is the other story running in parallel. Several US law firms — including Kaplan Fox & Kilsheimer, Rosen Law Firm, and Bernstein Liebhard — have filed securities class actions against Bloom Energy. The allegation: the company misled investors about its dependence on China for scandium oxide, a rare earth metal used in its fuel cells. The claims cover the period from February 27, 2025, through July 8, 2026 — the day Hunterbrook Media published a report accusing Bloom of obscuring its China reliance by routing supplies through third countries. Bloomberg Law reported on the litigation in early August.

Investors who bought shares between February 2025 and July 2026 have until September 28, 2026, to apply for lead plaintiff status, as Kaplan Fox reminded investors on Friday. The legal calendar now runs alongside the earnings calendar, and both are moving markets.

There's a certain irony here: the very companies positioned to power AI data centers are themselves entangled in the geopolitics of critical minerals. Scandium may be a niche metal, but the dispute raises a broader question about how independent Western energy infrastructure truly is from Chinese inputs.

A $25 Billion Backstop

The financial picture, meanwhile, has rarely looked stronger. Brookfield Asset Management expanded its financing framework for AI infrastructure projects with Bloom Energy from $5 billion to $25 billion in late June — a fivefold increase since October 2025. That backstop gives the company meaningful runway to fund growth without diluting shareholders.

For now, investors are left weighing two equally real narratives: a company with explosive revenue growth and a growing AI order book, against one defending itself from allegations that it concealed its supply chain vulnerabilities. Neither story is likely to simply disappear in the coming weeks. The market's job — calibrating how much of each to price in — is proving to be the hardest part.