Bloom Energy Shares Face Reality Check Amid AI Infrastructure Doubts

The recent sell-off in AI infrastructure stocks has delivered a sharp correction, with Bloom Energy finding itself squarely in the storm. Following an explosive rally this year that has still left the stock up over 200%, a combination of profit-taking, interest rate concerns, and questions over major project financing has triggered a significant pullback. The central question for investors now is the fundamental stability of the underlying AI power projects driving the narrative.

The stock's recent decline is part of a broader correction across the previously high-flying AI infrastructure sector. Investors are locking in substantial gains accrued since the start of the year, leading to a pronounced rotation out of these names.

Simultaneously, a deteriorating macroeconomic backdrop is applying pressure. Rising yields on US Treasury bonds and renewed inflation anxieties are particularly burdensome for capital-intensive growth stocks—a category that perfectly describes Bloom Energy. The development and financing of fuel cell systems for data centers require substantial investment, the present value of which declines as interest rates climb.

In current trading, the equity is attempting a modest recovery, adding approximately 2% to around €70 after severe losses in the prior session. Despite this uptick, the share price remains firmly below its 50-day moving average and well off its recent peak.

Scrutiny Over Data Center Project Financing

Market nerves were further frayed by speculation regarding the funding of large-scale AI data center projects. Rumors circulated that certain equity partners, such as Blue Owl Capital, might be withdrawing from infrastructure deals or scaling back commitments.

Available information currently suggests these concerns may stem from misunderstandings in the selection of financing partners rather than actual project cancellations. Industry participants like Oracle have emphasized that planned infrastructure initiatives are proceeding, even if the composition of capital providers may shift.

Critically for Bloom, this discussion does not fundamentally challenge the structural demand for its fuel cell solutions to power energy-hungry AI data centers. The debate centers more on the structure and cost of financing, not the core viability of the projects themselves.

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

Valuation Reset in a Higher-Rate Environment

The ongoing correction must be viewed in the context of an exceptionally strong run-up. Bloom Energy has been increasingly traded as a proxy for the "AI energy bottleneck" theme. Several high-volume partnerships, including those with Brookfield Asset Management and AEP, fueled investor enthusiasm and drove valuation multiples sharply higher—creating significant potential downside on any disappointment.

Investors are also processing recent updates from Oracle. While the software giant reaffirmed its use of Bloom's technology, its broader investment plans are being scrutinized more closely. This leads to a more cautious assessment of the speed at which the announced data center pipeline volume will convert into firm orders and revenue for Bloom.

The interest rate landscape remains a key factor. With the yield on the 10-year US Treasury near 4.1% and the latest inflation reading of 3.1% coming in slightly above expectations, rate-sensitive stocks are under pressure. Bloom has historically exhibited a high beta, meaning it tends to react with above-average sensitivity to shifts in interest rate expectations. In the current risk-off environment, this interest rate risk carries more immediate weight than the long-term AI demand story.

Looking Ahead: Execution is Key

Volatility is likely to persist in the coming weeks. For AI-adjacent industrial stocks like Bloom Energy, the market is searching for a new valuation equilibrium that balances the substantial structural opportunity against near-term risks.

The focus will center on several critical factors:
- Forthcoming US inflation and interest rate data
- Clarity on the financing structures for already-announced data center projects
- Evidence that the existing order backlog is converting to revenue as planned without margin dilution

From a technical perspective, the share price has breached important short-term support levels. Whether a sustainable floor can be established depends largely on Bloom's ability to convincingly address project execution quality and cost management in upcoming communications. Until these questions are resolved, the stock remains vulnerable to heightened swings, despite the company's undiminished potential role in providing "power for the AI era."