What happened
Bloom Energy (BE +8.94%) shares can't seem to get off the roller-coaster ride. After swinging wildly in trading yesterday, shares of the fuel cell specialist kicked off Thursday on a strong note, only to give up all of those gains just as swiftly. Bloom Energy popped 5% this morning but was trading down 3.5% as of 2:40 p.m. ET. That despite the company bagging a meaningful contract.
So what
Bloom Energy announced an interesting deal Thursday: Its fuel cell energy servers will make their way into cruise ships.
Image source: Bloom Energy.
Bloom Energy, Chantiers de l'Atlantique (CdA), and the cruise division of MSC Group are collaborating to launch the first cruise ship with fuel cells. While CdA is among the world's largest builders of passenger ships, MSC Group is the world's third-largest ship brand.
The MSC World Europa cruise liner is already under construction and will now be fitted with 150 kilowatts of Bloom Energy's fuel cells that'll serve as auxiliary power to liquefied natural gas (LNG). When combined with LNG, Bloom Energy's solid-oxide fuel cell technology can reduce carbon equivalent emissions by up to 60%.
Bloom Energy noted how the combination of LNG and its fuel cells can support the maritime industry's climate goals and pave the way for the industry's decarbonization given that more than 100 cruise ships requiring over 4 gigawatts of power have been approved for construction through 2027.
The MSC Group, in fact, also stated that it expects to use fuel cell technology in future builds on a larger scale as it strives for zero emissions.
Now what
This deal is the first such for Bloom Energy in the maritime industry, and it could therefore be the stepping stone for the company in a high-potential market. With sea trials for MSC World Europa expected to start in the second half of 2022, larger fuel cell installations in ships can't be ruled out if the trial results are promising. Bloom Energy stands a solid chance of bagging more contracts given its proven fuel cell technology that can deliver power through servers from renewable energy sources 24/7.
So far, so good. So why did Bloom Energy shares reverse course late Thursday? All I can think of is the broader market weakness; and where things are right now, growth stocks are the first to be hit every time the markets fall. I'd still urge investors, though, to focus on hydrogen, fuel cells, and Bloom Energy's long-term prospects before pressing the sell button on the stock.
