Why Bloom Energy Rocketed 36% Higher This Week
Key Points
Bloom Energy and AEP just expanded their partnership by $2.65 billion.
Bloom's fuel cells are a solution to a growing problem.
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Bloom Energy (NYSE: BE) shareholders are having a banner week. The stock of the fuel cell manufacturer has been soaring to start 2026. This week alone, shares rose 36%, according to data provided by S&P Global Market Intelligence.
That's because an arrangement announced in November 2024 was just updated to add another approximately $2.65 billion for Bloom's solid-oxide fuel cells to provide power to data centers.
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Bloom is becoming a go-to power provider
As tech companies increasingly invest more to build data centers for artificial intelligence (AI) compute power, the need to power those server racks is also growing. Bloom Energy's solid-oxide fuel cells, which can supply on-site power without risking disruptions to the power grid, have become a growingly desirable option.
Bloom's platform technology is ready now. It's not a future aspiration like some modular nuclear reactor options. Bloom states that estimates for growing electricity needs may increase by 60% by 2030. Data centers and electrification in transportation are significant contributors to the issue.
Bloom has been announcing partnerships over the last year that will utilize its microgrid fuel cell platform. This week, an existing partnership with American Electric Power expanded significantly.
In 2024, a subsidiary of AEP executed a purchase agreement to acquire 100 megawatts (MW) of solid oxide fuel cells from Bloom with an option to buy an additional 900 MW. A large portion of that option is being exercised for Bloom's solid oxide fuel cells. It calls for the development and construction of a fuel cell generation facility at a cost of approximately $2.65 billion.
Investors jumped into Bloom stock on that news this week, assuming that more deals may be announced as the need to power data centers grows.
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Howard Smith has positions in Bloom Energy and has the following options: short March 2026 $60 calls on Bloom Energy. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.
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