I have a history with Bloom Energy (NYSE: BE) stock. I have long been a believer in its fuel cell technology, and initially bought the stock in 2020 for $18.50 per share. Fast-forward to the artificial intelligence (AI) data center boom, and interest in its products exploded.
Bloom shares went parabolic and finished 2025 with a 291% annual gain. That continued into this year with Bloom's market cap peaking at nearly $100 billion. That's after the company reported just $2 billion in revenue for 2025.
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That was all too much, too fast for me. I sold call options with a strike price of just $60, and after several rounds rolling them out, my shares were called away. That was acceptable to me, as I didn't believe the underlying business was quite worthy of all the AI hype.
While management was announcing plans for capacity expansions, it would take significantly more revenue to justify the market valuation. Now shares are well off their peak, though.
Bloom began announcing new business partnerships, including a massive deal with Brookfield Asset Management initially worth $5 billion. To be clear, that funding wouldn't be going directly to Bloom. It represents investments to build AI infrastructure that would, in turn, purchase Bloom's advanced fuel cell technology.
Those planned investments have now been boosted to $25 billion. Bloom expects revenue this year to double to about $4 billion, with operating income approaching $1 billion. Demand is clearly there, and the company will have the means to further expand capacity.
That makes today's valuation look much more reasonable. Bloom's market cap sits at about $60 billion at the time of writing. Considering the growth expected to continue through 2027 and beyond, Bloom stock is a reasonable, if still risky, buy.
While the return on my Bloom investment was solid, a deeper dive into the underlying factors behind the stock's parabolic move would have been a more prudent approach than simply seeing it as an overreaction.
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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy and Brookfield Asset Management. The Motley Fool has a disclosure policy.
Is It Too Late to Buy Bloom Energy? My Honest Take. was originally published by The Motley Fool