Under the Spotlight: Bloom Energy ($BE)

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Remember when power companies were the blue-chip dividend payers your dad always talked about? It turns out AI can turn anything into a growth story.

Bloom Energy ($BE) has this week joined the ranks of the S&P 500 index after exiting a Russell small-cap benchmark just a few months ago. It’s been riding a boom in demand for something Silicon Valley suddenly can’t get enough of: electricity.

AI data centres need huge amounts of it, but getting a new facility connected to the grid can take years, or be blocked altogether by wary local councils.

This challenge has made Bloom Energy one of the biggest winners of the AI race. Its machines can generate its own energy on-site in a matter of months, with less noise and local air pollution than conventional generators.

The thesis is exciting but competition in the space is fierce and the sector is volatile. Let’s put it under the spotlight.

Firstly, how does Bloom make money?

Bloom’s origin story starts somewhere you might not expect: Mars.

Founder KR Sridhar worked on technology for NASA to make oxygen for astronauts. When the mission was scrapped, he realised he could reverse the process to generate electricity here on Earth.

The result became Bloom’s Energy Server: a modular fuel cell system that runs on natural gas, biogas or hydrogen. 

Most of Bloom’s money comes from selling these servers. Hardware brought in US$1.53 billion in 2025, with installation, maintenance and electricity sales making up the rest.

The advantage is these can be set up quickly to generate electricity on site. And because there’s no combustion, they don’t produce pollutants like diesel generators or gas turbines.

It’s a compelling case for energy hungry data centers desperate to source electricity. Enough gas turbines and generators are now reportedly on firm order to power something close to Australia's entire national grid – just to keep AI data centres running behind the meter.

What the numbers say

Bloom Energy listed in 2018, only recorded its first operating profit in 2024. The AI boom has put a rocket under the business since.

Revenue passed US$1B for the first time in the June quarter, up 166% year-on-year. Net profit attributable to shareholders hit US$196.3M, reversing the previous year's loss. 

Bloom is also keeping more of each sales dollar. Gross profit rose 232% to $355.6 million, and the margin itself climbed to 33.4%, from 26.7% a year earlier.

Meanwhile, full-year revenue guidance of US$3.9–4.2B points to roughly twice last year’s sales. That comes with a backlog of around US$20B as of 2026, or roughly five times this year’s expected revenue.

Who's buying the product?

Some very big names.

Oracle expanded an agreement in April to cover up to 2.8GW of fuel cell capacity, with an initial 1.2GW contracted. Its Project Jupiter campus in New Mexico alone could eventually use up to 2.45GW.

Equinix and American Electric Power are also customers. And in July, Sridhar said all the major US hyperscalers had validated and approved Bloom’s technology for their AI facilities. Approval is encouraging, although it doesn’t tell us how much each will spend.

Outside of datacenters, Bloom has also deployed more than 400MW in South Korea through SK ecoplant, with 500MW committed through 2027, alongside smaller projects across Asia.

Brookfield could help turn that interest into installations. Its financing partnership with Bloom has grown from US$5B to US$25B, allowing projects to proceed without customers footing the entire upfront bill.

What's Bloom's moat?

Right now, speed is a pretty good selling point. 

Bloom recently delivered an operational system to Oracle in just 55 days. Some other technologies, like large gas turbines, now have a lead time of 5-7 years, while even smaller turbines can take 18-36 months.

Fuel cells have other advantages. AI data centers are noisy and use enormous amounts of water and energy. Bloom’s technology is arguably greener, quieter and more efficient than competing technologies. Oracle expects Bloom’s system to cut nitrogen oxide emissions at Project Jupiter by about 92% compared with its previously planned gas turbines.

That doesn’t make them emissions-free. Feed them natural gas and they still produce carbon dioxide. Nor does Bloom have the market to itself. Caterpillar, GE Vernova and Cummins are chasing the same power-hungry customers, while FuelCell Energy and Plug Power offer competing fuel cell technologies. 

Bloom has an opening while conventional equipment is hard to get. So far it accounts for around 14% of tracked behind-the-meter data centre projects, second to Caterpillar at roughly 33%. The challenge is giving customers enough reasons to stick around when they have more options.

What are the risks?

For a company promising to solve a supply shortage, Bloom has some supply questions of its own.

In July, Hunterbrook challenged its access to scandium, a material used in its ceramic fuel cells, and alleged it relied on Chinese supply.

Bloom rejected those conclusions, saying it has enough scandium oxide for current demand and its backlog, and isn’t dependent on China. Hunterbrook disclosed a financial interest in the shares falling. A related shareholder lawsuit has also been filed, with the claims remaining allegations.

The sales mix deserves attention, too. Related-party revenue reached US$373.3M in the March quarter, before dropping to US$2.8M in June. Investors need to understand how much growth depends on financing arrangements involving Bloom itself.

And while its fuel cells are already operating commercially, powering enormous AI campuses raises the stakes. Reliability, maintenance costs and equipment life will all matter as deployments grow.

The biggest threat may be simply that AI spending slows before all those ambitious projects become paying customers.

Is it a buy?

Bloom has landed in the right place at the right time. Revenue is accelerating, margins are improving and customers have an expensive problem its technology can help solve.

But investors are paying for that growth. Bloom trades at around 19x this year’s expected revenue and 76 times forecast earnings. That means there’s already plenty of future success baked into the share price.

Bloom still needs to deliver bigger projects and prove its technology against formidable rivals.

The question is how much of today’s excitement will translate into lasting earnings, and how much investors have already paid for.

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Kylie Purcell

Senior Markets Commentator

Kylie Purcell is an investments analyst and finance journalist with over a decade of experience covering global markets, investment products and digital assets. Her commentary has been featured in publications including the Australian Financial Review, Yahoo Finance and The Motley Fool. She has a Masters Degree in International Journalism from Cardiff University and a Certificate of Securities and Managed Investments (RG146).