What happened

Bloom Energy (BE -0.23%) stock jumped out of the gate Friday, racing ahead 6.2% through 10:45 a.m. EDT on the back of a bullish note from investment bank J.P. Morgan.

Citing a 21% pullback in Bloom's share price over the past month, J.P. insisted that the stock is still worth $36 a share, and upgraded its recommendation to "overweight."  

Arrow angles up on a green stock chart

Image source: Getty Images.

So what

From November last year through February 2021, the analyst says, investors were exhibiting "momentum-style euphoria" over the prospects for hydrogen fuel cell stocks. That euphoria, however, turned into fear that stocks like Bloom and its peers Plug Power and FuelCell Energy had been bid up too far -- sparking a sell-off.

And yet, StreetInsider.com reports that J.P. Morgan remains convinced that "BE's proprietary solid-oxide fuel-cell technology [installed] in small, clean, configurable modules that can be located anywhere there is a gas supply," will make the company's electricity offerings "competitive with the grid in most markets globally in the 2020s, yielding an estimated [total addressable market] of over $150bn."

Now what

Granted, there's no guarantee that Bloom will win the entirety of this market. Plug and FuelCell, among others, will also try to claim their share. Nevertheless, J.P. Morgan insists that there's a "strong value proposition" to buying Bloom Energy at its recent valuation of four times sales after its sell-off.

Is the "hydrogen economy" for real? Only time will tell for sure, but investors who believe the hype should keep a close eye on Bloom Energy in particular, because of the three major publicly traded hydrogen plays, it's the one expected to begin producing profits earliest.

According to S&P Global Market Intelligence, Bloom's first full-year profit will arrive in 2023, while Plug investors will have to wait until 2024, and FuelCell investors until 2025.