Shares of Bloom Energy (NYSE:BE) jumped as much as 34.3% in trading Tuesday after announcing a huge partnership with Samsung Heavy Industries. Shares are still up 31% as I'm writing at 2:20 p.m. EDT.
Bloom Energy and Samsung Heavy Industries have signed a joint development agreement to create fuel cell-powered ships. The companies hope to present the design to customers in 2022. This could be a 300-megawatt (MW) market annually for Bloom Energy, which is major considering the fact that the company had 380 MW of deployments between its founding in 2001 and the end of 2019.
The new ships aim to meet the International Maritime Organization's 2030 and 2050 environmental targets to reduce emissions. Bloom's fuel cells aren't zero emission and do run on natural gas, but they're still a step in the right direction in terms of building a cleaner shipping industry.
We don't know exactly what the revenue or margin potential of this partnership is, and it'll be years until it makes any financial impact at all. In the meantime, Bloom Energy has been posting hundreds of millions of dollars in financial losses each year, which should concern investors buying into an opportunity that could take many years to materialize. I am bullish on fuel cells long term, but Bloom Energy has to get closer to a sustainable financial position before I'll jump into this energy stock.