Key Points Bloom Energy produces solid oxide fuel systems for on-site power. Bloom inked a $5 billion strategic partnership with Brookfield. The company has seen four straight quarters of increased sales. 10 stocks we like better than Bloom Energy › Bloom Energy (NYSE: BE) is on the frontlines of a potentially disruptive technology in the energy sector: solid oxide fuel cell systems, or "energy servers," as Bloom names them. These fuel cells turn fuel, like natural gas and hydrogen, into electric ...

Core Insights - Bloom Energy has experienced a significant stock price increase of over 700% in the past year, driven by its solid oxide fuel cell technology and growing demand in the clean energy sector [1][6] - The company has a substantial product backlog of $2.5 billion and a service backlog of $9 billion, indicating strong customer interest and future growth potential [4] - Despite the positive outlook, the company's high price-to-sales (P/S) ratio of approximately 12x compared to a five-year average of 3x suggests that the stock may be overvalued [7] Company Overview - Bloom Energy manufactures solid state power cells that provide reliable, uninterrupted energy for various applications, including utilities, hospitals, and data centers [2] - The company's fuel cells are recognized for their clean energy benefits, as they do not emit carbon dioxide, and their rapid deployment capabilities, which align with current trends in artificial intelligence [3][5] Market Dynamics - The recent partnership with Oracle to supply onsite power to AI data centers within 90 days highlights Bloom Energy's competitive advantage in speed and efficiency compared to traditional utilities [5] - Historical patterns indicate that previous surges in Bloom Energy's stock price have led to declines, raising concerns about the sustainability of the current enthusiasm [9] Investment Considerations - Investors are currently pricing in significant future growth, but the company's history of unprofitability complicates traditional valuation metrics like price-to-earnings [6] - The current market sentiment suggests that only aggressive growth investors may find Bloom Energy appealing at this time, given the high expectations already embedded in the stock price [10]

Core Insights - Plug Power's initial public offering (IPO) in 1999 generated significant investor enthusiasm, with shares rising from a split-adjusted $160 to over $1,300 within months [1] - The company's stock price subsequently fell by more than 99% following the dot-com bubble burst, but the current landscape for hydrogen fuel cells is more promising due to increased efficiency and demand projections for clean fuels [2] Group 1: Hydrogen Demand - The potential for large-scale hydrogen demand has been a recurring theme, with reports suggesting significant growth in global clean hydrogen demand projected to 2050 [3] - However, McKinsey & Company had to revise its long-term demand estimates down by 10% to 25% within a year, indicating challenges in realizing this demand [3] Group 2: Cost Competitiveness - The primary barrier to hydrogen adoption has been cost, with hydrogen prices increasing by 20% to 40% since earlier forecasts, making it less competitive compared to existing fuel sources [5] - Experts suggest that hydrogen could become cost-competitive by 2030, but this would likely require government incentives [5] Group 3: Technology Viability - Various hydrogen technologies exist, including proton exchange membranes for high power density applications, solid oxide fuel cells for large-scale power generation, and anion exchange membranes with lower production costs but durability issues [6] - The success of Plug Power will depend on which hydrogen technologies ultimately prevail in the market [6][7]