Bloom Energy Shares Surge 70% Amid Major AEP Deal

Shares of Bloom Energy (NYSE:BE) skyrocketed 70% on Friday following the announcement of a deal with American Electric Power (NASDAQ:AEP) to supply up to 1 gigawatt (GW) of fuel cells. This marks the largest commercial procurement of fuel cell technology globally.

Key Highlights

• The agreement positions Bloom Energy as a key player in meeting rising energy demands of artificial intelligence (AI) data centers.
• The deal includes an initial order of 100 megawatts (MW) of Bloom's solid oxide fuel cells (SOFCs), with further expansions anticipated in 2025. These cells will be co-located at customer sites, providing clean, reliable, and high-density power capable of generating 100 MW per acre.

KR Sridhar, Founder, Chairman, and CEO of Bloom Energy, expressed excitement about the partnership: "We are thrilled to be working with AEP as they lead the charge to bring innovative solutions to the transforming electricity market."

With a proven track record of over 1.3 GW deployed and a factory ready to deliver GWs of products annually, Bloom Energy aims to meet the rapid growth in electricity demand.

Analyst Upgrades

Following the news, Piper Sandler analysts upgraded Bloom Energy to Overweight, suggesting the AEP deal "changes the game" for the company. They estimate the agreement could generate $3 billion in equipment revenue and could lead to partnerships with other utilities. The firm raised its price target for Bloom Energy to $20 per share, indicating potential for Bloom Energy to be viewed alongside established data center equipment providers.

Piper Sandler noted, "In our view, the scale of the agreement (we estimate equipment alone could be worth $3.0B) with a large utility provides proof of concept that BE's product can be utilized to power large-scale data centers and could open the door to future arrangements with other utilities."