Why Bloom Energy Stock Dropped Today
Key Points
Bloom Energy stock soared this year on hopes its fuel cells will power the data centers of the future.
But now, SpaceX wants to put data centers in space, and use solar to power them.
- 10 stocks we like better than Bloom Energy ›
SpaceX is planning to IPO, and this could be bad news for Bloom Energy (NYSE: BE) stock. Shares of the fuel cell stock, which also produces hydrogen for use as fuel cell-fuel, sank 8.5% through 1:25 p.m. ET Friday.
They may have even farther to fall if this news pans out.
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Image source: Bloom Energy.
SpaceX's AI ambitions
Why is that? The answer goes straight to the heart of what made Bloom stock boom this year: Artificial intelligence data centers, and their insatiable appetite for electricity.
Earlier this week, Ars Technica confirmed rumors that SpaceX plans to IPO its stock in 2026, in a deal that could value the rocket stock at $1.5 trillion. The report echoed earlier stories from Bloomberg and The Wall Street Journal, and Ars added some new facts to the story:
Elon Musk intends to use money from a SpaceX IPO "to develop a modified version of the Starlink satellite to serve as a foundation for building data centers in space." Ultimately, SpaceX aims to deploy 100 terawatts-worth of AI data centers in orbit.
Is Bloom Energy stock a sell?
Why is this bad news for Bloom? Precisely because of where Musk wants to put his data centers: in space, where it is cold, where solar power is abundant, and where no one will need Bloom's fuel cells to cool and power the data centers.
When you consider that the primary reason Bloom stock soared this year is because investors see its fuel cells as a solution to powering data centers on Earth, the prospect of putting data centers in space undermines the investment thesis supporting Bloom Energy stock.
Add wider worries that the whole artificial intelligence stock bubble is about to burst, and the bloom may be off the rose for Bloom Energy stock.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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