What Happened?
Shares of electricity generation and hydrogen production company Bloom Energy (NYSE: BE) jumped 21% in the afternoon session after the company reported third-quarter financial results that significantly beat Wall Street's expectations on both revenue and profit.
Bloom Energy announced revenue of $519 million, a 57.1% increase year-on-year that surpassed analyst estimates by over 23%. The company's profitability also showed marked improvement. Adjusted earnings per share came in at $0.15, which was 50% higher than the consensus forecast and a significant turnaround from a loss in the same quarter last year. Further highlighting the operational progress, Bloom's gross margin expanded by 5.4 percentage points, and its operating margin turned positive. The company also generated positive free cash flow of $7.37 million, a stark contrast to the cash burn of over $83 million in the prior-year period. This strong all-around performance, beating expectations and demonstrating a clear path to sustainable profitability, fueled investor optimism.
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What Is The Market Telling Us
Bloom Energy’s shares are extremely volatile and have had 70 moves greater than 5% over the last year. But moves this big are rare even for Bloom Energy and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 16 days ago when the stock gained 28.7% on the news that it announced a $5 billion strategic partnership with Brookfield Asset Management to develop infrastructure for Artificial Intelligence (AI).
Under the agreement, Bloom became the preferred provider of onsite power for Brookfield's global "AI factories." The deal involved Brookfield investing up to $5 billion to deploy Bloom's fuel cell technology, which provides reliable and scalable power that can be set up quickly without depending on traditional power grids. This capability is critical as AI computing demands massive amounts of energy that legacy grids often struggle to supply. The companies were already collaborating on AI factory projects, including a European site that was expected to be announced before the year's end. The news was met with optimism from analysts, with Susquehanna, for example, maintaining a "Positive" rating and significantly raising its price target on the stock.
Bloom Energy is up 494% since the beginning of the year, and at $138.70 per share, has set a new 52-week high. Investors who bought $1,000 worth of Bloom Energy’s shares 5 years ago would now be looking at an investment worth $9,429.
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