Shares of Bloom Energy (BE) jumped by more than 30% at the time of writing after the company announced a major deal with Brookfield Asset Management (BAM). More specifically, Brookfield plans to invest up to $5 billion to install Bloom’s fuel cell technology in AI data centers. These fuel cells can run on natural gas, biogas, or hydrogen and offer fast, on-site power without needing to connect to the traditional electric grid.
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Together, Bloom and Brookfield are planning to build what they call “AI factories” around the world, starting with a site in Europe, which is expected to be announced later this year. Bloom has already worked with companies like American Electric Power (AEP), Equinix (EQIX), and Oracle (ORCL) to install hundreds of megawatts of fuel cells. This new partnership comes as the AI industry quickly expands, with Nvidia (NVDA) and OpenAI (PC:OPAIQ) recently announcing plans to build 10 gigawatts of data centers, which is enough to power New York City during peak summer.
However, the problem is that the U.S. electric grid is aging and slow to add new capacity. This is making it harder for AI companies to get the power they need, and some worry that more data centers could cause higher electricity prices for everyday users. To solve this, Bloom and Brookfield are focusing on off-grid power systems, known as “behind-the-meter” solutions. Unsurprisingly, Nvidia CEO Jensen Huang also recently stated that building data centers with their own power is crucial for keeping up with AI growth and protecting consumers from rising energy costs.
Is BE Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on BE stock based on eight Buys, eight Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average BE price target of $62.12 per share implies 45.1% downside risk.
