Investment bank Jefferies recently raised its price target for fuel cell manufacturer Bloom Energy Corp (BE.US) from $31 to $53 but maintained its "underperform" rating on the stock. The bank cited Bloom Energy's recent $5 billion strategic partnership with Brookfield Asset Management (BAM.US) as the primary reason for the target price adjustment.
On October 13, Bloom Energy announced the collaboration, officially becoming Brookfield's preferred on-site power provider for its global AI factories. The two companies will jointly design and deliver AI facilities worldwide, including a European site to be disclosed by year-end. Under the agreement, Brookfield will invest up to $5 billion to deploy Bloom Energy's advanced fuel cell technology to support its AI infrastructure expansion. Brookfield positioned this partnership as its first investment in dedicated AI infrastructure, focusing on large-scale AI factories, power solutions, computing infrastructure, and strategic capital partnerships.
Despite the target price hike, Jefferies remains cautious, emphasizing the need for clarity on the joint venture's profitability model. The fourth quarter is seen as a critical period for investors, as Bloom Energy is expected to disclose its order backlog—ideally including significant sales contributions for 2026 and 2027.
Analysts at Jefferies stated, "While we've modestly raised expectations post-partnership, the profit structure of the joint venture and its actual impact on Bloom Energy's cash flow require further clarity. Q4 will serve as a key indicator when the company reveals its order backlog—which should ideally capture a substantial portion of 2026–2027 sales. Timely project execution remains vital to meeting heightened investor expectations."
Bloom Energy has emerged as one of 2025's top-performing stocks, surging over 495% year-to-date. Over the past year, the company transitioned from a volatile clean energy stock to an AI darling, with its fuel cells viewed as a solution to soaring AI power demands due to their off-grid deployment capability and rapid scalability.
In its latest earnings report, Bloom Energy posted Q3 revenue of $519 million, up 57% YoY and beating estimates of $428 million. Adjusted EPS of $0.15 surpassed expectations of $0.10, while adjusted EBITDA reached $59.05 million (vs. $46.02 million expected). Operating margin improved to 1.5% from -2.9% YoY, and free cash flow turned positive at $7.37 million (vs. -$83.76 million YoY).
Additionally, Bloom Energy announced plans to expand production capacity, targeting 2 gigawatts of annual fuel cell output by 2026—enough to quadruple its revenue from 2025 levels.