Bloom Energy Corp. (NYSE:BE) has been a primary beneficiary of 2025’s artificial intelligence (AI) hype cycle, with its stock rallying on the back of high-profile wins and rapid deployment stories.
Bank of America analyst Dimple Gosai reiterated an Underperform rating on Bloom Energy and raised its price forecast to $24 from $21, implying a 72% downside from Tuesday’s close of $86.27.
The stock has surged more than 650% over the past year on data center power deals, but the analyst warns the rally is driven more by AI hype than fundamentals.
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The analyst said that BE currently trades at a premium multiple of 99.9x 2025E EV/EBITDA, at richer multiples than GE Vernova (NYSE:GEV) and even Nvidia (NASDAQ:NVDA), despite weaker revenue growth and margins.
Bank of America cautions that the company’s fundamentals do not align with the elevated valuation: revenue guidance for 2025 remains at $1.65–$1.85 billion, despite notable announcements with Oracle (NYSE:ORCL) and American Electric Power (NASDAQ:AEP).
Despite improvements, Bloom’s service margins and fuel cell reliability remain below historical targets, with stack life still struggling to reach the 5-year mark consistently.
The bank stated that competitive pressure is intensifying from well-established players such as Caterpillar (NYSE:CAT), Cummins (NYSE:CMI), Rolls Royce, and GE Vernova, whose offerings generally outmatch Bloom on price, speed, and reliability, particularly for the co-location segment that remains niche in the data center market.
In July, Bloom Energy reported second-quarter adjusted earnings of 10 cents per share, sharply above the consensus estimate of 1 cent and compared with a loss of 6 cents a year earlier. Revenue rose 19.5% year-on-year to $401.2 million, beating analysts’ average forecast of $378.0 million.
The analyst noted that on-site power remains niche, with only 6% of 540 tracked data centers using co-located generation. Turbines and reciprocating engines dominate with lower costs, while small modular reactors are emerging as a cheaper long-term option.
Price Action: BE shares were trading lower by 14.93% to $65.83 at last check Wednesday.
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