Bloom Energy Shares Experience Wild Price Swings

The debate over whether the artificial intelligence infrastructure narrative is sustainable or headed for a collapse continues to divide market participants, contributing to significant volatility in Bloom Energy's stock. After weeks of downward pressure, the equity staged a notable recovery this Friday, surging over 10% in a single session and sparking tentative hopes that a bottom may be forming.

This recent rally did not occur in a vacuum. It followed a test of a threatening low near $81, bringing the share price perilously close to a critical support zone between $75 and $80. Buyers entered the market at this level, propelling the price temporarily above $90. Shares ultimately closed the week at approximately €75, translating to a weekly loss of just under one percent.

Technical indicators highlight the extreme volatility. With an annualized volatility reading exceeding 112%, Bloom Energy currently ranks among the most turbulent securities in the technology sector. Furthermore, a Relative Strength Index (RSI) above 92 signals a technically overbought condition, serving as a cautionary note for short-term traders.

AI Data Center Focus Drives Sentiment

The catalyst for this rollercoaster ride is rooted in the discussion surrounding AI investments. Last autumn, Bloom Energy captured significant attention by announcing a $5 billion partnership with Brookfield Asset Management and securing collaborations with Oracle. This news initially sent the stock soaring to a 52-week high above €123.

Should investors sell immediately? Or is it worth buying Bloom Energy?

However, sentiment shifted last week following reports of potential financing challenges for major data center projects, specifically those involving Blue Owl Capital. The entire sector came under pressure, with Bloom Energy shares being hit particularly hard. From its November peak, the stock has now declined by almost 39%.

Solid Operations Meet Ambitious Valuation

From a fundamental perspective, Bloom Energy's operational performance remains robust. The company reported third-quarter revenue of $519 million, a solid figure that provides at least partial support for its growth story. Nevertheless, the company's current market valuation of approximately $21 billion leaves little room for operational disappointments.

The situation is intensified by a high level of short interest in the stock. Any positive developments regarding the Brookfield partnership or clarity on AI-related power demand could trigger a short squeeze, potentially catapulting the share price upward. Conversely, renewed doubts about data center funding would likely instigate another wave of selling pressure.

A Pivotal Week for Price Action

The immediate focus for investors is whether the share price can consolidate around the $88 to $90 range (approximately €84 to €86). Defending this zone would offer a preliminary indication of a genuine trend reversal. A breakdown below €75, however, would likely precipitate the next significant sell-off. With volatility expected to remain elevated, the coming trading sessions will determine whether speculative bulls or skeptical bears gain the upper hand.