Bloom Energy Stock Is Up 153% This Year. Can the Rally Continue?

Bloom Energy (NYSE: BE) has become a standout performer amid the booming energy demands from artificial intelligence (AI) data centers. With its fuel cells powering new data centers for industry giants like Oracle, the stock has skyrocketed 153% since the beginning of the year.

Bloom has emerged as a crucial power provider in the rapidly growing artificial intelligence sector, and over the past few years, the narrative surrounding the stock has shifted dramatically. However, it's been a volatile ride for Bloom Energy's stock, which is down 37% from its 52-week high.

With its impressive gains, investors are wondering: Can Bloom Energy keep the momentum going? Let's explore its growth prospects to find out more.

How Bloom Energy is capitalizing on data centers' massive power needs

AI data centers require a massive amount of baseload power, and those needs are only growing. According to data from Gartner, a global business intelligence firm, data center electricity consumption is projected to grow 26% from last year to 565 terawatt-hours (TWh) in 2026. Bank of America notes that the U.S. power grid could face a 100-gigawatt (GW) capacity deficit by the year 2030.

Traditional utilities could take years to bring capacity online. This is where Bloom Energy stands out. Bloom's fuel cells utilize an electrochemical process to generate electricity without combustion and can run on natural gas, biogas, or hydrogen.

Its solid oxide fuel cells can also be rapidly deployed in less than two months. This gives Bloom a massive "time-to-power" advantage, especially as many hyperscalers look to secure on-site power generation to avoid further strain on the power grid. Bloom proved its time-to-power advantage by deploying a system for Oracle Cloud Infrastructure in just 55 days, crushing its 90-day promise.

Image source: The Motley Fool.

Bloom Energy's July 28 earnings announcement revealed stellar results, with both revenue ($1.07 billion vs. $827 million consensus) and adjusted earnings per share ($0.78 vs. $0.41 consensus) coming in ahead of analyst estimates. The company also raised its revenue outlook to a range of $3.9 billion to $4.2 billion.

Strong growth is expected to continue. At the end of June, Bloom and Brookfield Asset Management expanded on their strategic partnership to finance power projects for AI infrastructure, scaling it from $5 billion to $25 billion, a fivefold increase.

Building on this momentum, on July 16, Oaktree and Industrial Development Funding (IDF) announced a $1.7 billion investment to deploy Bloom's fuel cell technology in support of Nebius's AI cloud platform compute capacity.

Is Bloom Energy stock still a buy?

Bloom Energy has emerged as a massive winner from the data center energy boom, and the stock reflects that with its massive gains in recent years. However, as with most growth stocks, Bloom Energy is vulnerable to significant price swings and has a beta of 3.8, meaning it is nearly four times as volatile as the S&P 500.

With that said, as long as hyperscalers continue to build out data centers and make massive capital expenditures, Bloom Energy should continue to benefit from these historical tailwinds.

Courtney Carlsen has positions in Bloom Energy and Oracle. The Motley Fool has positions in and recommends Bloom Energy, Brookfield Asset Management, and Oracle. The Motley Fool recommends Gartner. The Motley Fool has a disclosure policy.