Here's Why Bloom Energy Surged 59.7% Higher in September

Key Points

• Bloom Energy's shares were driven higher by growing demand for its clean energy solutions for data centers.

• BFC Power filed with Wyoming regulators to build a 900 MW fuel cell facility using Bloom Energy's solid oxide fuel cells

• Several analysts covering the stock also raised their price targets during the month.

• 10 stocks we like better than Bloom Energy ›

Shares of Bloom Energy (NYSE: BE), a provider of solid oxide fuel cell systems for clean on-site power, soared 59.7% higher in September, according to data provided by S&P Global Market Intelligence.

The company continues to attract investor attention due to its ability to meet the growing energy demands for data centers powering artificial intelligence (AI). In September, it continued to ride those tailwinds higher.

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Bloom Energy's opportunity

Bloom Energy provides clean, reliable, and efficient on-site power through its solid oxide fuel cell systems for its customers. These systems can generate electricity from various sources, including natural gas, hydrogen, or biogas, without combustion, significantly lowering carbon emissions and air pollutants.

What makes it appealing for customers is that Bloom's fuel cells deliver continuous, resilient power even during grid outages. These fuel cells can also reduce dependence on traditional utilities and volatile electricity prices. Most importantly, these fuel cells can be deployed in as little as 50 days to provide on-site power.

Why Bloom Energy surged in September

According to analysts at UBS, BFC Power filed with Wyoming regulators to build a 900 MW fuel cell facility near Cheyenne, using Bloom Energy's solid oxide fuel cells. Most capacity will come from Bloom's new Energy Server 6.5, with some from the 5.0 model. This project is part of a broader Crusoe–Tallgrass partnership to develop a 1.8 GW AI data center campus in Laramie County.

Image source: Bloom Energy.

Additionally, several investment banking analysts covering the stock substantially raised their price targets to reflect Bloom Energy's growing opportunity. Some of the raises include:

• UBS raised its target to $105 from $41, maintaining a buy rating.
• Morgan Stanley raised its target to $85 from $44, maintaining an overweight rating.
• BTIG raised its target to $80 from $42, maintaining a buy rating.

These price target raises come on the heels of several major deals during the year. Most recently, in July, the company entered into an agreement with Oracle to deploy its fuel cell technology to power selected Oracle Cloud Infrastructure (OCI) data centers in the U.S.

Is Bloom Energy a buy today?

While several investment banks raised their price targets, others had a more cautious tone. For example, Jefferies downgraded the stock to underperform with a price target of $31, while Bank of America maintained its underperform rating with a price target of $24.

Caution may be warranted on this stock. Bloom Energy has surged 726% higher in the past year, and the stock trades at a lofty valuation at 153 times its projected 2026 GAAP earnings per share. The stock is less appealing at this valuation, and investors may be better off waiting for a more favorable price before buying.

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Bank of America is an advertising partner of Motley Fool Money. Courtney Carlsen has positions in Bloom Energy and Morgan Stanley. The Motley Fool has positions in and recommends Jefferies Financial Group and Oracle. The Motley Fool has a disclosure policy.