Bloom Energy Accelerates Capacity Amid Surging Data Center Demand, RBC Says
Bloom Energy (BE) is seeing demand accelerate from data center operators seeking rapid access to power, with management saying execution on a growing backlog of large projects will be critical to unlocking its next phase of growth, RBC Capital Markets strategists said on Wednesday.The fuel cell maker has limited spare manufacturing capacity remaining for 2026 as demand continues to rise, driven by artificial intelligence-related data center expansion, RBC analysts said, citing Bloom executives.The energy firm said "time to power" remains the most important consideration for many data center customers, giving Bloom an advantage as traditional power generation technologies face equipment shortages and lengthy development timelines.The company's fuel-cell systems have recently secured major projects with customers including Oracle (ORCL), Nebius Group (NBIS), Brookfield Infrastructure Partners (BIP), and American Electric Power.Bloom's management said the technology is benefiting from concerns surrounding permitting, water consumption, emissions, and noise associated with conventional power generation.Though Bloom's technology has long offered advantages such as low noise levels, no water consumption, and minimal local emissions, executives said those benefits are becoming more influential as years of cost reductions have narrowed the price gap with competing power solutions.Bloom expects 2026 to be a pivotal year as investors and customers focus less on proving the technology and more on the company's ability to deliver large-scale projects on time.RBC said the successful execution of major contracts could encourage additional hyperscale customers still evaluating Bloom's systems.To support growth, Bloom is expanding manufacturing capacity to 2 gigawatts per year by the end of 2026. The energy firm said previous guidance indicated it could add 1 GW of capacity within six to nine months, at a cost of $100 million to $150 million.RBC analysts said Bloom executives indicated that future capacity additions could become more cost-efficient, though expansion timelines may remain closer to 9 months due to space constraints within existing facilities.Bloom has additional land available in Delaware and California for potential greenfield expansion and does not expect power supply constraints to limit factory growth. The company is also experiencing improved economics within its services business.RBC said the average operating life of Bloom's fuel-cell stacks across its installed fleet has increased to about five and a half years from about five years a year ago, while newly manufactured units are approaching six years.The bank said the company's management said further improvements remain possible, including through AI-driven optimisation to extend equipment life and reduce customer costs.Bloom maintained its target of about 10% product cost reductions this year, continuing a trend that spans more than two decades.Price: $283.51, Change: $-3.81, Percent Change: -1.33%