Bloom Energy (BE) Stock Has Surged on $110 Oil. Is There Still Room to Run?

A barrel of oil recently topped $110 -- up about $35 from the price a year ago. That price is also up about 50% from last month's price of roughly $74.

Consumers focus more on the price they pay, and the national average price of a gallon of gas recently topped $4, with diesel jumping to $5.55 a gallon. Those prices are up from $2.98 and $3.76, respectively, on Feb. 28, before Israel and the United States struck Iran.

Image source: Getty Images.

These sharp moves have investors worrying about what it all means for their stocks. Consider, for example, Bloom Energy (NYSE: BE). Bloom's stock has averaged annual gains of 89% over the past three years and is up 573% over the past year (as of April 1). But over the past month? It's trading down 15%.

A key reason for that is likely the stock's valuation, which is in nosebleed territory, with a recent price-to-sales ratio of 14, well above the five-year average of 3. The stock has soared in part because of the proliferation of artificial intelligence (AI), which has led to the proliferation of data centers to handle AI processing.

You see, Bloom Energy is a specialist in providing power to data centers via fuel cell systems. It's alternative power, too, appealing in a time of high oil prices.

Is it a good buy now? Should you invest? Well, no one can tell where the stock (or our economy) will be a month or a year from now. Bloom Energy could keep surging on high demand, but should the market pull back, it might pull back, too, and growth stocks often fall harder. Also, the company is not hugely profitable at this point.

Still, Bloom is growing robustly, signing some big multibillion-dollar deals and boasting a hefty $20 billion backlog of orders. At a minimum, you might want to add it to your watch list.

Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.