As hyperscale enterprises continue to ramp up capital expenditure, Bloom Energy (BE) has emerged as a standout player amid surging electricity demand from data centers, leveraging its solid oxide fuel cell technology. Over the past 12 months, the energy solutions provider has seen its share price climb a cumulative 497%, recently securing major partnerships with multiple hyperscale operators and utility suppliers.
Despite strong performance in its latest fiscal quarter, investors are reassessing the valuation of this hydrogen energy stock in light of the nearly fivefold increase in share price. U.S. Secretary of Energy Chris Wright noted that the nation’s power grid is expected to face a shortfall of nearly 100 gigawatts over the next five years. Bloom Energy’s fuel cells not only provide emergency backup power but also enable rapid electricity supply without the need for time-consuming grid expansion projects that can take years.
According to the fourth-quarter earnings report, the company’s product backlog surged 2.5 times to $6 billion, while its total order pipeline, including services, reached $20 billion. A key growth driver was a $5 billion strategic partnership with Brookfield Asset Management, an energy-as-a-service agreement covering Brookfield’s trillion-dollar infrastructure asset portfolio, spanning 140 data center and industrial real estate projects. Notably, Bloom Energy deployed equipment for Oracle in just 55 days—significantly ahead of the promised 90-day delivery cycle. The company is now accelerating capacity expansion, aiming to increase annual production capacity from 1 gigawatt to 2 gigawatts by the end of 2026 and raising its 2026 revenue guidance to $3.3 billion.
However, weak profitability is becoming a valuation concern. Despite full-year revenue growing 37% year-over-year to $2 billion, GAAP earnings per share stood at a loss of $0.37, with the loss widening threefold compared to 2024. In the fourth quarter, gross margin contracted by 750 basis points, operating margin narrowed by 700 basis points to 11.3%, and adjusted earnings per share were nearly breakeven. Analysts expect earnings per share of $1.38 for the current fiscal year, translating to a forward P/E ratio of 107x based on the current share price. Even though EPS is projected to rise to $2.92 in 2027 and $4.58 in 2028, the triple-digit P/E ratio remains a deterrent for conservative investors.
Industry observers believe that until the power grid infrastructure undergoes modernization, Bloom Energy will continue to benefit from the electricity supply gap in data centers. However, its high valuation ensures that the stock remains highly volatile, making it more suitable for investors with a higher risk tolerance. The company projects 60% revenue growth to $3.2 billion in 2026, along with non-GAAP EPS of approximately $1.40—yet the P/E multiple of over 100x remains a hurdle that the market cannot easily overlook.
