Why Bloom Energy Stock Crashed This Week
Key Points
Bloom Energy announced some great news for data center builders this week.
Investors have pushed Bloom Energy stock higher betting on future earnings.
- 10 stocks we like better than Bloom Energy ›
Bloom Energy (NYSE: BE) stock is more than 40% off its 2026 highs reached in June. That doesn't mean shareholders have had a bad year, though. Bloom shares are still up by about 125% year to date as of this writing.
That juxtaposition makes it even more timely to examine why shares sank 13.5% this week as of Friday morning, according to data provided by S&P Global Market Intelligence. Let's look at whether the drop gives investors who felt they missed out a great chance to own shares now.
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Bloom introduced a new deployment system for its fuel cell systems this week. The company said its new Power Connect system can reduce the time required for on-site power installations by more than 40%. That will help data center operators bring new capacity online sooner, generating revenue and driving higher returns on investment.
One might think such a development would boost the stock, rather than the double-digit drop seen this week. But investors have already bid the stock higher, anticipating growing future business. Bloom Energy expects to generate about $4 billion in revenue this year, doubling last year's sales. But the company is already valued at close to $60 billion, implying strong growth beyond 2026.
Some investors are locking in gains rather than waiting for the company to grow into its valuation. But long-term investors can think differently. Bloom Energy is boosting capacity, envisioning a growing order backlog. That makes the recent pullback a reasonable opportunity to invest in a name that has become a popular choice for data center operators needing reliable power.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.
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