Why Bloom Energy Rallied Today

Shares of Bloom Energy (NYSE: BE) rallied 10% on Monday, as of 12:04 p.m. ET.

Bloom makes fuel cell systems that can turn either natural gas or hydrogen into electricity without combustion. In addition, Bloom makes an electrolyzer that can actually produce hydrogen.

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Not only was Bloom's stock hit hard earlier this year on April's tariff fears, but it was also threatened by the new tax bill making its way through Congress, with the initial House version repealing the Inflation Reduction Act's hydrogen tax credit next year.

But over the weekend, the Senate's version of the bill, which will go to a vote today, extended those credits for a longer period of time.

The Senate is giving hydrogen and other renewables some breathing room

Most stocks involved with the production or distribution of renewable energy have been dinged this year, especially after a version of the "Big, Beautiful Bill" passed the House of Representatives. The House version included quick and draconian phaseouts of renewable tax credits.

However, it appears the Senate is relaxing some of the harshest measures of the House bill in its version, giving existing projects some time to go through construction and deployment over the next couple of years, while still ending the credits sooner than outlined in the IRA.

The latest version of the Senate bill, which is being voted on today, extends the hydrogen tax credit until January 1, 2028. That's a two-year extension over the January 1, 2026, phaseout in the House bill. Of note, the 45V clean hydrogen tax credit can offer up to $3 per kilogram if a hydrogen construction project begins by that time.

Image source: Getty Images.

Bloom Energy could be a major AI winner

Bloom's energy servers, which can more cleanly burn natural gas, seem like a great fit for artificial intelligence (AI) data centers, which require lots of consistent power that burns cleanly. So Bloom, unlike some other hydrogen pure-plays, wasn't necessarily in mortal danger should the House version of the "BBB" pass.

Still, today was certainly encouraging for its hydrogen prospects, and the prospects of hydrogen generally, which could be a key base fuel in a lower-emissions future. In any case, Bloom is a growth stock to watch going forward, as it actually just turned profitable for the first time last year and should continue to play a role in powering AI data centers.

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Billy Duberstein and/or his clients have 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.