Morgan Stanley has significantly upgraded its outlook for Bloom Energy Corp (BE.US), noting that the company's potential for rapid growth has substantially increased as power demand to support artificial intelligence data centers accelerates. The investment bank raised Bloom Energy Corp's target stock price from the previous $44 to $85.
The report emphasized that Bloom Energy Corp's recent agreement with Oracle (ORCL.US) to supply fuel cells for its AI data centers marks a critical turning point. Oracle's latest quarterly bookings reached $332 billion, far exceeding expectations and highlighting the surging demand for computing power, which in turn intensifies the need for reliable power supply.
Analyst David Arcaro stated: "Bloom Energy Corp has established an extremely attractive partnership with Oracle and is among the few manufacturers capable of rapidly scaling up production capacity."
Morgan Stanley noted that Bloom Energy Corp is one of the few companies able to quickly expand manufacturing scale and deliver fuel cells in a short timeframe, an advantage that becomes particularly pronounced as utilities and data centers face multi-year delays in connecting to traditional power grids.
Bloom Energy Corp has committed to investing $100 million to double its annual production capacity to 2 gigawatts by the end of 2026, and expects to secure new orders from hyperscale computing companies and hardware manufacturers in the AI ecosystem.
Morgan Stanley currently forecasts that the company's revenue will achieve a compound annual growth rate of 37.5% through 2030, up from the previous estimate of 26.9%. The firm's bullish scenario valuation pushes the target price to $185, reflecting Bloom Energy Corp's potential to play a more significant role in the global energy market. In a bearish scenario, if growth and profit margins underperform, the stock price could fall to $37.
The report mentioned that future catalysts include announcements of contracts with hyperscale computing companies, further partnerships with utilities, and additional evidence of intensifying grid constraints.