Why Bloom Energy Stock Tumbled Today
Has the shine worn off this AI energy darling?
By Howard Smith
Bloom Energy (BE 6.09%) has been one of the leading artificial intelligence (AI) stocks this year. Shares of the solid-oxide fuel cell system maker have rocketed 275% year to date. But the stock is retreating today after hitting an all-time high yesterday.
Bloom shares plunged as much as 13% in early trading, and were still down 5.2% as of 1:20 p.m. ET. That may be due to investors realizing Bloom Energy's solution to powering data centers isn't the only one coming.
A nuclear renaissance
Bloom Energy has signed multiple deals to provide on-site fuel cell power systems for AI data centers under construction or in the planning stages. The on-premise solution and clean energy approach have some investors thinking Bloom could dominate serving the growing data center market.
A deal announced yesterday between Chevron and Microsoft, however, shows that there will be other providers for data center energy needs. Natural gas turbines will support the West Texas project beginning in 2028 and run for 20 years.
That there could be multiple energy solutions for data centers was reinforced today, when the U.S. Department of Energy announced financing to help revitalize the United States' nuclear supply chain and expedite the installation of 10 new large-scale reactors.
$17.5 billion in loans is being made available to help finance five eligible utility and energy company projects. The goal is to have 10 newly designed large nuclear reactors under construction by 2030.
That's another sign that Bloom Energy won't monopolize data center energy supply needs, and that its stock price may have run too far on that presumption.