What happened

Extending their 94% rise in November, shares of Bloom Energy (NYSE:BE) rose 17% in December, according to data from S&P Global Market Intelligence. The strong performance in the last month of 2020 helped the stock to lock in an overall gain of 284% for 2020. While not as impressive as the 973% rise in the stock of Bloom Energy's peer, Plug Power (NASDAQ:PLUG), it was surely a welcome sight for investors as Bloom Energy's stock had dipped 25% in 2019.

Unrelated to any company-specific news, the stock's rise could be chalked up to a couple of analysts' affirmations, the growing enthusiasm for hydrogen solutions, and recent legislation.

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Image source: Getty Images.

So what

Beginning December on an inauspicious note, Bloom Energy's stock received a downgrade to neutral from overweight with a $26 price target from Paul Coster, an analyst at JPMorgan, according to Thefly.com. According to Coster, shares (trading at about $25) were fairly valued at the time of his rating.

But investors didn't have to wait long for the bulls to be heard. Shortly after Coster's rating, Johnson Rice began coverage on the stock and assigned a $32 price target, representing 28% upside to where shares were trading at the time. Two weeks later, Morgan Stanley analyst Stephen Byrd boosted his price target to $32 from $21 while maintaining an overweight rating.

Though analysts' ratings were one catalyst for the upward movement in Bloom Energy's stock, it's likely that shares also benefited from the growing interest in a hydrogen economy. Last month, for example, a Canadian government report recognized hydrogen as a "key enabler to help [the nation] reach net-zero emissions" by 2050; in addition, the report stated that if its plan is fully implemented, it could "lead to a $50 billion domestic hydrogen sector." Although Bloom Energy doesn't currently generate significant revenue from hydrogen generation, it may in the future. In July, Bloom Energy announced the beginning a hydrogen generation pilot project in South Korea.

Lastly, the recently stimulus bill also inspired investors to pick up shares. With more than $2 billion allotted for modernizing the grid, investors recognized the legislation as a potential boon for the fuel cell industry.

Now what

While investors greeted the rise in Bloom Energy's stock last month with open arms, they would be well-served to remember that the movement wasn't predicated on significant news from the company. Consequently, shareholders should look for concrete news from the company that illustrates its growth, paying especially close attention to the company's fourth quarter earnings report to see if the company's financials continue to support the claim that Bloom Energy is the most compelling fuel cell investment opportunity.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.