Bloom Energy Shares Face a Reality Check After AI-Driven Rally

The stock of clean energy firm Bloom Energy is undergoing a significant correction, cooling off after a spectacular run that was heavily fueled by artificial intelligence (AI) optimism. A swift reassessment is underway as investors grow skeptical about the pace of multi-billion dollar investments into AI data centers and Bloom's ability to capture the expected windfall.

Despite still holding a substantial year-to-date gain of nearly 190%, the equity has retreated sharply from its peak. Trading around €66.01, the share price now sits approximately 47% below its 52-week high recorded in early November. This decline accelerated markedly in recent sessions, with the stock shedding almost 20% over just three trading days, including a double-digit percentage drop on December 17.

This reversal mirrors a broader shift in sentiment away from capital-intensive growth stocks in the clean energy and AI infrastructure sectors. Several key pressures are driving the sell-off:

• Climbing Financing Costs: Rising U.S. Treasury yields increase the expense of funding large-scale energy and infrastructure projects, pressuring valuations of interest-rate-sensitive growth companies.
• Scrutiny of AI Commitments: Reports suggesting potential funding cuts for major data center developments have prompted investor caution regarding the sector's near-term trajectory.
• Profit-Taking Activity: Following an ascent of over 300% in the past year, many shareholders have seized the opportunity to lock in substantial gains.
• Macroeconomic Headwinds: Broader uncertainties surrounding trade policy, cost inflation, and potential tariffs are contributing to a risk-off mood.

Data Center Deals: A Dual-Edged Sword

A specific report catalyzed recent nervousness, indicating that Blue Owl Capital might not proceed with financing a previously announced $10 billion data center project in Michigan, a venture involving Oracle. This news sent ripples through the entire AI infrastructure segment.

Bloom Energy finds itself at the center of this narrative shift. The fuel cell specialist has strategically positioned itself as a power provider for energy-intensive data centers. In October, the company announced a major $5 billion strategic partnership with Brookfield Asset Management, wherein Brookfield would construct AI data centers powered by Bloom's technology.

The core investment thesis—long-term growth driven by AI infrastructure demand—is now being rigorously tested. The market is questioning whether such mega-projects will materialize as planned, or if financing conditions, regulatory hurdles, and demand dynamics will slow the pipeline.

Valuation Adjusts to a New Reality

At its zenith, Bloom Energy's market capitalization exceeded $33.5 billion. Even at that time, this valuation appeared ambitious relative to a quarterly revenue base of $519 million and a business model that remains in a growth phase.

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

Operationally, the company has demonstrated tangible progress:

• For the third quarter of 2025, it reported an operating profit of $7.8 million, a notable improvement from an operating loss of $9.7 million in the prior-year period.
• On a non-GAAP basis, the operating result was $46.2 million, representing an increase of $38.1 million compared to Q3 2024.
• The operating margin expanded to 8.9%, aided by scaling benefits and improved cost management.

These metrics confirm the underlying business is maturing. However, the severe price correction underscores that a significant portion of the previous valuation was predicated on future growth expectations and AI potential, rather than current earnings power.

Inherent Volatility Remains a Hallmark

Bloom Energy is unequivocally a high-risk equity. According to source data, its shares experienced 79 single-day price movements exceeding 5% in the past year. A beta coefficient of approximately 3.0 highlights its extreme sensitivity to broader market sentiment and interest rate fluctuations.

The company's model also relies on long-term contracts, government incentive schemes, and supportive policy. Shifts in subsidies, regulatory uncertainty, rising input costs, and tariffs can rapidly alter project economics. Investors are currently recalibrating for these exact risks, to the stock's detriment.

From a technical analysis perspective, the damage is clear: the share price now trades roughly 30% below its 50-day moving average, though it remains well above its 200-day average—a pattern reflecting a sharp pullback within a longer-term uptrend. A recent Relative Strength Index (RSI) reading above 90 signaled an extremely overbought condition that is now being unwound.

Navigating the Gap Between Promise and Execution

The company is now caught between two powerful forces. The long-term growth narrative, centered on the immense power demands of AI data centers and the need for efficient, reliable energy sources, remains intact. Conversely, short-term uncertainties regarding project financing, interest rates, costs, and regulation are impinging on the realization of these plans.

The coming quarters will be pivotal. The market will focus on whether major partnerships, such as the one with Brookfield, convert into concrete, funded projects and if Bloom can sustain its operational improvements. The current price action demonstrates a clear shift: valuations are being re-anchored to delivered financial results and secured contracts, moving away from pure future speculation.