Bloom Energy’s Surge: The Hidden Catalyst Behind This Week’s Rally

Wall Street blinked—and Bloom Energy stock just ripped through resistance. Here's what the algorithms missed.

Fuel cells, hot money: The clean energy play became a momentum trader's playground this week, with shorts scrambling as institutional FOMO kicked in. No earnings surprise, no breakthrough tech—just old-fashioned gamma squeeze meets ESG hype.

The cynical angle: Another 'future of energy' stock riding speculative flows while actual adoption timelines get... creatively interpreted. (Bonus jab: At least they're not another SPAC zombie.)

One thing's clear: When liquidity sloshes into niche tech plays, even fuel cell companies can moon. Until the next rotation.

More hyperscaler deals in the pipeline?

Bloom Energy's stock got a big lift in July, after fuel cells remained eligible for tax credits in the "One Big, Beautiful Bill" and the company inked a direct deal withto power its artificial intelligence (AI) data centers. Traditionally, Bloom Energy had made deals with data center real estate companies, power providers, and utilities.

However, the Oracle deal may be paving the way for more direct deals with other cloud AI companies. Bloom's energy servers are based on fuel cells that can convert natural gas to electricity without combustion, making them a cleaner alternative than other forms of natural gas-based power. So, it's no surprise that with demand for electricity skyrocketing due to the AI data center buildout, Bloom is seeing renewed interest.

Speaking with Bloomberg on Wednesday, Sridhar said, "You have seen the announcement with Oracle -- expect to see similar things coming soon." Apparently, hinting at more deals with cloud companies was enough to MOVE the stock significantly higher.

In addition to the Bloomberg interview, Bloom may also have benefited from the lower-than-expected inflation reading that came out on Tuesday. Following a lower-than-expected Consumer Price Index (CPI) report, economists have greatly increased their odds of a cut to the federal funds rate in September. Usually, interest rates are good for high-growth stocks trading at high multiples, so this could have helped this week's rally as well.

Image source: Getty Images.

Bloom Energy's rally has made the stock expensive

Bloom currently trades around 6.5 times sales and 82 times this year's earnings estimates, so it's definitely not a cheap stock, especially for a company that basically sells hardware units.

Nevertheless, the company currently finds itself in a fortuitous position amid the AI data center buildout. The question is whether the opportunity is as significant as the stock price suggests.