Bloom Energy (BE 3.83%) is on the frontlines of a potentially disruptive technology in the energy sector: solid oxide fuel cell systems, or "energy servers," as Bloom names them.
These fuel cells turn fuel, like natural gas and hydrogen, into electricity without combustion. As such, they emit fewer emissions than traditional grid generators and can provide around-the-clock power to data centers, hospitals, utilities, industrial plants, and other facilities needing reliable power.
Bloom Energy's fuel cells at a cafe. Photo source: Bloom Energy.
Ever since Bloom went public in 2018, investors have seen potential in its energy technology, especially its capacity to turn hydrogen into electricity with zero carbon emissions. The stock, however, has only recently taken off, skyrocketing over 400% this year.
The reason isn't just that Bloom has potential; it's that Bloom is finally converting its potential into serious kinetic energy.
Why Bloom's power solution is winning
Bloom's solid oxide fuel cells are fast to deploy, scalable, and designed for 24/7 power generation. Those traits are essential to one of the company's biggest opportunities: AI data centers. As CEO K.R. Sridhar put it recently: "Bloom is at the center of a once-in-a generation opportunity to redefine how power is generated and delivered."
NYSE: BE
Key Data Points
That opportunity was on full display this quarter. In October, Bloom inked a $5 billion strategic partnership with Brookfield to build more advanced AI factories. Brookfield wants to combine its industrial know-how with Bloom's fuel cells to build an AI infrastructure capable of powering advanced models.
The company's momentum has been showing up in top-line growth. Its third-quarter revenue, for example, hit a record $519 million, up 57% from last year. This marks its fourth straight quarter of record sales.
As AI computing continues to ramp up, more and more companies will likely need the on-site power that Bloom can provide. Its margins are improving, and cash flow looks like it's heading in the right direction. For investors who are already betting on the future of AI, few energy stocks are as complementary to that vision as this one.
