I'd Rather Own Bloom Energy Than Nvidia Right Now. Here's My Case.

Bloom Energy (NYSE: BE) and Nvidia (NASDAQ: NVDA) are both great plays on the AI boom. Bloom develops solid oxide fuel cells (SOFCs), which can convert natural gas, propane, biogas, and hydrogen into electricity without any combustion. A growing number of big tech companies and hyperscalers are using its SOFC systems, which can be deployed in just a few months in off-grid locations, to support the expansion of their cloud and AI infrastructure.

Nvidia is the world's largest producer of data center GPUs, which are used to train AI algorithms. Most of the top cloud and AI companies use Nvidia's GPUs, and Nvidia locks them in with its proprietary software and services. That's why Nvidia is often considered the linchpin and bellwether of the growing AI market. Both of these stocks still have plenty of upside potential. But if I had to choose one over the other, I'd buy Bloom for three simple reasons.

Image source: Getty Images.

1. It dominates its niche market

Bloom isn't the only producer of SOFCs, but it's the top provider of stationary, multi-megawatt, utility-scale SOFC deployments. Its major customers include Oracle, CoreWeave, Nebius, and Equinix. Bloom is also firmly backed by Brookfield Asset Management (NYSE: BAM), which funds its AI infrastructure projects through a strategic partnership. In late June, Bloom and Brookfield expanded the scale of that partnership from $5 billion to $25 billion.

2. It has a wider moat

Bloom arguably has a wider moat than Nvidia because it doesn't face many direct competitors. Nvidia remains the dominant producer of AI accelerators for data centers, but it faces intense competition from AMD's lower-cost GPUs, Broadcom's custom AI chips, and innovative challengers like Cerebras. All of those competitors will likely reduce Nvidia's overall share of the data center market and eventually limit its long-term growth.

3. It has stronger growth rates

From 2025 to 2028, analysts expect Bloom's revenue and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to grow at CAGRs of 70% and 120%, respectively. From fiscal 2026 (which ended this January) to fiscal 2029, they expect Nvidia's revenue and adjusted EBITDA to grow at CAGRs of 48% and 52%, respectively.

Bloom's stock isn't cheap at 36 times next year's adjusted EBITDA, but its massive backlog -- which swelled to $20 billion at the end of 2025 -- could justify that higher valuation. Nvidia seems like a bargain at 12 times next year's adjusted EBITDA, but its growth is gradually cooling -- and it could struggle to match Wall Street's bullish estimates. That's why I wouldn't be surprised if Bloom outperforms the top AI chipmaker and attracts more attention over the next few years.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Bloom Energy, Broadcom, Brookfield Asset Management, Equinix, Nvidia, and Oracle. The Motley Fool has a disclosure policy.