Shares of the US fuel cell company Bloom Energy surged by 15% on Tuesday following an announcement of a $1.7 billion project investment to provide dedicated power solutions for AI cloud computing firm Nebius.
The investment involves Industrial Development Funding and asset management giant Oaktree Capital, with Morgan Stanley acting as the sole tax equity investor and arranger, and Mitsubishi UFJ Financial Group providing senior debt financing. Bloom Energy will deliver "behind-the-meter" power capabilities to Nebius to meet its growing AI computing demands.
As a significant AI computing provider in Europe, Nebius recently secured a $2 billion investment from NVIDIA and signed a $27 billion infrastructure agreement with Meta. The company is confronting power constraints amid its AI infrastructure expansion, while Bloom Energy's solid oxide fuel cells can be rapidly deployed on-site within 90 to 120 days without relying on the grid.
This $1.7 billion investment marks another significant development following a series of major contracts for Bloom Energy. In April of this year, the company entered a framework agreement with Oracle for up to 2.8 gigawatts of fuel cell purchases and expanded its collaboration with Brookfield Asset Management from $5 billion to $25 billion.
JPMorgan analyst Mark Strouse raised the price target for Bloom Energy from $26.7 to $34.6, indicating an approximate 75% potential upside. Analysts anticipate that the company's upcoming second-quarter earnings report, scheduled for July 28th, is likely to continue its strong performance against the backdrop of persistently tight AI power demand.
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