Many investors believed Bloom Energy (BE 4.57%) was a great way to capitalize on the artificial intelligence (AI) data center boom. The fuel cell manufacturer offered a way to immediately install on-site power generation to support the vast electricity needs of the data center.
However, Bloom stock is now crashing as investors shift away from higher-risk growth sectors. That's being driven by questions surrounding whether capital for the data center buildout will continue to materialize.
Bloom shares are ending the week on another down note, dropping 13% as of 11:20 a.m. ET.
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Will spending and raising billions yield a return?
Less than a month ago, Bloom announced a $2.2 billion capital raise. That came after the company inked a partnership with Brookfield Asset Management, where the asset manager would invest $5 billion in AI infrastructure assets using Bloom's fuel cell technology for onsite power needs.
Now, investors wonder if significant AI investments will actually pay off. After Bloom issued convertible notes to raise fresh capital, existing shareholders will also experience dilution. The sector rotation away from all things AI is hitting Bloom stock hard today.
NYSE: BE
Key Data Points
Long-term investors might want to ignore the noise and hold on, though. Bloom has a promising solution to meeting growing power needs, and the company has already generated record revenue in every quarterly period over the past year. While the whims of investors may change weekly or even daily, Bloom Energy still looks to be on the longer-term path to profitability. That makes the stock worth keeping.
