Should You Buy Bloom Energy Stock Before It Joins the S&P 500 on Sept. 21?

Bloom Energy (NYSE:BE) is joining the S&P 500 (SNPINDEX:^GSPC). S&P Dow Jones Indices made it official earlier this month: The fuel cell maker enters the index before the market opens on Monday, Sept. 21.

The move caps an exceptional year for Bloom, whose systems generate electricity on-site for data centers and other major power users. Shares have roughly tripled in 2026 as of this writing, even after declining almost 7% on Monday as part of a broad sell-off in stocks linked to the artificial intelligence (AI) trade.

They trade near $263, about 25% under the stock's 52-week high of $351.28.

Should you buy before the index funds have to?

Image source: Getty Images.

The index pop has mostly disappeared

The case for acting quickly is mechanical. After all, about $13 trillion in assets were indexed to the S&P 500 at the end of 2024, according to S&P's own tally.

Funds that replicate the index don't get to weigh the price. They have to own Bloom, and they typically make the swap in the closing auction on the final trading day before a change takes effect -- this Friday, Sept. 18, in Bloom's case.

But that buying is well telegraphed, and investors have learned to get ahead of it. Researchers at Harvard Business School found that the additional return from a stock joining the S&P 500 declined from an average of 7.4% in the 1990s to 0.3% in the decade through 2020. Put another way, the market now absorbs the index funds' buying without much of a pop.

Bloom's own trading matches that pattern. Shares jumped almost 10% in the first trading session after the announcement. As of this writing, they have given back most of it and trade about 4% above where they closed before the news.

Index membership changes who holds Bloom's shares. What matters more, I think, is that it doesn't change what the business earns.

Accelerating growth

On that score, Bloom has been delivering. The company passed $1 billion of quarterly revenue for the first time in the second quarter, with sales up 166% year over year -- and faster than the first quarter's 130%. Not only did growth speed up, but Bloom also turned a profit. Operating income came in at $182.2 million, compared with a small loss a year before. Earnings per share swung to $0.62 from an $0.18 loss.

The full-year outlook has risen just as fast. Management's guidance pointed to about 60% revenue growth when the year began. In April, the company raised the midpoint to about 80%.

And in July it raised guidance once more, to $3.9 billion to $4.2 billion -- about 100% growth at the midpoint compared with the $2.02 billion of revenue Bloom reported in 2025. The company also now expects $800 million to $900 million of non-GAAP (adjusted) operating income this year, nearly double what it projected in February.

The buyers behind this surge are AI data centers and the companies building them. In the second-quarter release, CEO KR Sridhar said Bloom's power systems have been validated by "all the major US hyperscalers" (the largest cloud computing companies) and called the company "a standard for AI onsite power."

Too pricey?

The market, though, has noticed all of this. At about $263, Bloom stock's forward price-to-earnings ratio (its price measured against next year's expected earnings) is about 53.

At that price, investors have arguably already paid for this year's doubling and are counting on years of robust growth afterward. If spending on AI data centers cools, Bloom's growth and its stock price could both fall fast. Concerns about exactly that were behind Monday's slide.

Of course, the slowdown may never come. Management sees demand accelerating, and the guidance raises back that up. But at this price, Bloom has to keep executing at a pace few companies can maintain for long.

So, should you buy Bloom Energy stock before it joins the S&P 500? If the index change is the reason, I don't think so. The buying from index funds is a one-time event, and history says it no longer provides much of a boost.

In the end, if you believe in the business, shares will still be there after the funds have finished buying. As for me, the price is too rich. I'd rather wait for a better entry point than buy just ahead of the index funds. If the stock pulls back meaningfully, or if earnings start catching up with the price, I'd take another look.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.