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.
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).
Also Read: Bloom Energy Stock Is Sliding Wednesday: What’s Going On?
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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