Is Bloom Energy Stock Set to Break Out Before Its April 28 Earnings?

Bloom Energy (NYSE: BE) stock has gone on an absolute tear, increasing 1,500% since the start of 2024. This surge is fueled by the booming demand for energy from artificial intelligence (AI) data centers.

Companies are flocking to Bloom's solid-oxide fuel cells, which offer a quick and reliable way to get their data centers up and running. With its earnings report just around the corner, is Bloom Energy poised for a further breakout?

Bloom Energy is seeing surging demand

Electricity demand is surging as hyperscalers build out massive data centers to power the next generation of artificial intelligence (AI) algorithms. These modern data centers require significantly more power, creating an urgent need for energy solutions right now.

That's where Bloom Energy's solid-oxide fuel cells come into the picture. Its Bloom Energy Server provides on-site power generation using various fuels, including natural gas, biogas, and hydrogen. What makes it appealing to hyperscalers right now is that these fuel cells can be deployed in months, not years. Last year, it delivered its fuel cell system to Oracle in 55 days.

At the end of last year, Bloom Energy's product backlog stood at $6 billion amid incredibly robust demand from data center operators. Analysts at Wells Fargo noted another advantage for Bloom Energy: It is less supply-constrained than competitors such as FuelCell, which could be huge as it looks to fill the power needs of the 1.5 gigawatts of proposed data center projects currently in the works.

Image source: Bloom Energy.

What investors can expect from its first-quarter results

Looking toward Bloom's first-quarter earnings, analysts project earnings per share (EPS) of around $0.13, up from $0.03 in the same quarter last year. Meanwhile, revenue is estimated at $536 million, representing year-over-year growth of 64.3%.

Investors will want to watch its backlog growth and commentary around more data center deals. This month, Bloom announced an extended partnership with Oracle, which intends to procure up to 2.8 gigawatts of Bloom's fuel cell systems. Investors will also want to monitor its progress in deploying its fuel cells and converting its $20 billion backlog into revenue.

Beyond this, Bloom Energy brought on Simon Edwards as its new chief financial officer. Edwards has nearly 20 years of experience scaling technology companies, and his insights into the needs for data centers could help Bloom continue to capitalize on the growing demand for power from the AI industry.

Investors are paying a hefty premium for future growth

Bloom Energy is growing quickly, and investors are paying a hefty premium for that growth right now. Right now, Bloom Energy is trading at 163 times its 2026 projected EPS of 1.41. Looking further down the road, analysts project Bloom Energy's EPS could be $4.92 by 2028, giving it a valuation of 47 times its projected 2028 earnings.

While momentum could continue to push this stock higher, at its current valuation, I think investors are best off taking a more cautious approach to Bloom Energy stock.

Wells Fargo is an advertising partner of Motley Fool Money. Courtney Carlsen has positions in Bloom Energy and Oracle. The Motley Fool has positions in and recommends Bloom Energy and Oracle. The Motley Fool has a disclosure policy.