Why Bloom Energy Stock Soared 34% in September, and Why It Might Have More Room to Run

Bloom Energy (NYSE:BE) is taking a multi-pronged approach to accelerate its momentum as a leading provider of data center power. Investors are buying in, helping send Bloom Energy stock rocketing 34.3% higher in September, according to data provided by S&P Global Market Intelligence.

Wall Street analysts are on board as well, with one boosting Bloom's price target to $308 per share at the start of October. Barclays, led by analyst Christine Cho, raised its price target from $276 per share. The new target implies another 6.5% upside, even after the stock's September surge.

Expanding capacity to meet demand

One reason for that optimism is Bloom Energy's recent move to expand production capacity for its fuel cell systems. The need for power solutions for data centers is so widespread that Bloom and investment firm Brookfield Asset Management announced a fivefold expansion of its data center partnership earlier this year. Brookfield now expects to finance $25 billion worth of power projects for AI infrastructure.

To help support that demand, Bloom Energy reportedly recently leased a 158,500-square-foot facility in Fremont, California, where one of its existing manufacturing facilities is also located. Investors noted that as a concrete step to fill existing and future orders. In its second-quarter report, Bloom management raised full-year revenue guidance to a range that implies 100% year-over-year growth at the midpoint of just over $4 billion.

Image source: The Motley Fool.

Public relations push

One concern investors have is whether growing public backlash against data centers could derail returns on the billions being invested to build data centers and fill them with AI infrastructure equipment. Bloom Energy has been taking action in that regard.

Data centers require large swaths of real estate and high energy to power advanced compute capacity. Neighbors of the proposed sites are pushing back on much of that land use and its local impacts. Concerns about water usage and environmental impacts, power costs, and broader economic fears that AI will take jobs have been well-publicized.

Bloom Energy , in a new partnership with ESPN, is joining its season-long College Football Campus Tour to engage communities and support local emergency responders.

Bloom is being proactive in spreading the message that its energy solution is one that communities should welcome. The college football tour began in College Station, Texas, where Bloom Energy's chief marketing officer, Natalie Sunderland, recognized local firefighters with a donation. She stated, "From firefighters and first responders to the power systems that keep businesses, schools, and hospitals running, much of that work happens behind the scenes. We're excited to bring that conversation directly to communities across the country this season."

Helping shape the narrative around AI and advanced manufacturing, and supporting economic growth, is a way for the company to ensure its order book continues to grow. That also helps keep Bloom Energy shares in demand with investors.

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy and Brookfield Asset Management. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.