What happened
Higher-risk sectors are out of favor with investors right now, as demonstrated by a monthlong downtrend in hydrogen fuel cell stock Bloom Energy (BE 1.69%). Today, Bloom shares had plunged 7.5% as of 3:30 p.m. ET. That brings the last month's loss in Bloom Energy to nearly 25%.
NYSE: BE
Key Data Points
So what
After the Inflation Reduction Act (IRA) was signed into law more than a month ago, many alternative energy stocks soared. That included Bloom Energy, but it's been downhill ever since. Investors just don't want to look that far into the future as short-term economic uncertainty remains.
Hydrogen gets some large subsidies in the legislation, and Bloom should benefit from it. That makes the stock a buy to some investors, but most don't want to even be in the alternative energy sector right now.
Now what
The law is designed to boost the use of hydrogen as an energy source. Bloom has been working on its own to build its business, but that hasn't been enough to overcome the sector headwinds that investors see.
Bloom has announced two big partnerships in just the last 10 days. The company is teaming with Xcel Energy to install an electrolyzer to produce clean hydrogen at the energy provider's Prairie Island Nuclear Generating Plant in Minnesota. Bloom also said last week that it was chosen by a North American food producer to help power its California food processing facilities to make it fully independent from the state's energy grid.
But progress expanding the use of its hydrogen-producing electrolyzers isn't enough for investors right now. Today is another day with technology stocks leading the market lower. It's hard to expect the negative momentum in a name like Bloom Energy to change as long as investors are concerned about an overall decline in economic prospects.
