After weeks of Iran dominating markets, investors are beginning to shift their attention elsewhere, especially with earnings season in full swing and the AI trade back in fashion.
However, that doesn't mean the war's impact on the global economy is gone. Even as the ceasefire holds, President Trump reportedly told his staff to prepare for a longer-term blockade of Iran, a sign that oil prices are likely to remain elevated and could move higher.
A barrel of Brent Crude jumped 5% on Wednesday to $110 in response to the report, and oil executives are beginning to warn of an extended supply shock, which could last into 2027. Meanwhile, countries in Africa and Asia that depend on oil from the Strait of Hormuz are beginning to ration energy, unsure when adequate supplies will return.
There's a lot of uncertainty around the situation in energy, but one stock that looks ideally positioned is Bloom Energy (NYSE: BE), a maker of hydrogen fuel cells.
Image source: Getty Images.
Bloom's breakthrough
Bloom is a producer of hydrogen-powered solid oxide fuel cells, and the stock has soared in the last few years as the alternative energy company has benefited from the AI and data center boom, as its fuel cells are easy to deploy for AI data centers, which require large amounts of power.
Bloom soared again following its first-quarter earnings report as it delivered 130% year-over-year revenue growth to $751.1 million, smashing expectations at $540 million, and it reported a strong adjusted operating profit of $129.7 million, which was up 10x from the year before. Adjusted earnings per share jumped from $0.03 to $0.44, easily beating the consensus at $0.13.
Earlier this month, Bloom announced an expansion with Oracle, one of the AI hyperscalers, to deploy up to 2.8 gigawatts of power after already putting 1.2 GW into effect across Oracle projects. That showcases Bloom's effectiveness in delivering supplemental power and its embrace by the AI industry.
NYSE: BE
Key Data Points
Why high oil prices could be a win for Bloom
The longer oil prices stay elevated, the more consumers and businesses are going to search for alternatives to oil and, in some circumstances, natural gas. Tesla noted increased interest in its EVs since the war in Iran began, and EV sales have jumped around much of the world.
Bloom figures to be a beneficiary as well, as data center operators, manufacturers, and others that consume large amounts of power look for alternatives.
The company noted on the recent earnings call that competing energy options are increasing their cost to the customer, putting Bloom in a favorable position.
Of course, the outcome of the war and the situation in the Strait of Hormuz is unknown, and a resolution would undermine the case for alternative energy companies. Still, Bloom looks like a company that's well-positioned to grow with or without high oil prices.
If the blockade continues, that will only be an added bonus for the stock.
