Bloom Energy Corporation (BE) Powers AI Data Centers: Analyst Insights and Market Outlook

“My goal in this role is to put AI into the hands of every student and every teacher… and also give them the skills to learn how to do it responsibly and effectively”.

Belsky revealed that student adoption of ChatGPT is “very, very high,” and parents are generally supportive, realizing that AI skills as essential for future careers.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A bird’s eye view of a power generation platform with a power plant in the background.

Number of Hedge Fund Holders: 25

Bloom Energy Corporation (NYSE:BE) leverages solid-oxide fuel cell systems for on-site power generation, playing a dominant role in meeting the rising energy demands of AI data centers.

On Tuesday, November 19, HSBC analyst Samantha Hoh downgraded Bloom Energy Corporation (NYSE:BE) from Buy to “Hold” and raised the price target to $24.50 from $17.20. While the firm likes the AI stock on its AI data center and hydrogen secular themes, the recent strong price performance and expectations are reflected already, which is why they view the valuation as “fair”.

“Bloom has plenty of excess manufacturing capacity in the near term but may need to increase capacity at its Fremont facility from c750 MW to the GW scale by late 2025. Our estimates assume the company adds capacity gradually to its existing roofline while working capital continues to be a drag in the near term. However, we forecast Bloom to generate positive free cash flow in 2026 (accelerated from 2027 previously) and are increasing our DCF-derived TP to USD24.50 (from USD17.20), which incorporates a higher long-term/terminal growth rate for a longer and stronger tailwind from AI data center demand. Our DCF-derived TP of USD24.50 implies modest upside of 3.2%; hence we are downgrading the stock from Buy to Hold. We continue to like the Bloom story based on its exposure to strong secular themes of AI data center and hydrogen, but given the recent strong price performance and expectations reflected already, we view the valuation as fair.”

Overall, BE ranks 8th on our list of AI news stories you can’t miss. While we acknowledge the potential of BE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BE but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.