BE: AI Data Center Partnership Will Drive Long-Term Upside Potential

Analysts have sharply raised their price target on Bloom Energy to approximately $157 per share from about $59, citing expectations for significantly faster revenue growth, improved profit margins, and a modestly lower future valuation multiple. Together, these factors support a substantially higher fair value estimate.

What's in the News

• Bloom Energy and Brookfield announced a $5 billion strategic partnership to build next generation AI factories that tightly integrate compute, power, and data center infrastructure to meet surging AI demand (company announcement).
• The partnership will deploy Bloom Energy's fuel cell technology at scale to provide reliable, scalable, clean onsite power for AI data centers, reducing dependence on legacy grids (company announcement).
• Brookfield plans to make this its first investment under a dedicated AI infrastructure strategy, leveraging its track record of over $100 billion in digital infrastructure investments and $550 billion in critical assets globally (company announcement).
• Bloom Energy and Brookfield are already collaborating on global AI factory designs, including an initial European site expected to be announced before year end (company announcement).

Valuation Changes

• The fair value estimate has risen significantly from approximately $58.93 per share to $157.00 per share, reflecting a markedly more optimistic long term outlook.
• The discount rate has increased slightly from about 8.94 percent to roughly 9.22 percent, implying a modestly higher required return for investors.
• The revenue growth assumption has risen substantially from roughly 29.33 percent to about 60.82 percent annually, indicating expectations for much faster top line expansion.
• The net profit margin assumption has increased meaningfully from around 18.74 percent to approximately 26.88 percent, signaling improved long term profitability expectations.
• The future P/E multiple has declined modestly from about 28.93 times earnings to roughly 25.65 times, suggesting a slightly more conservative valuation despite the stronger assumptions used in the model.