Jefferies raised its price target on Bloom Energy from $229 to $264 but maintained its Hold rating. The firm believes Bloom Energy's core logic of tapping into AI data center power demand through behind-the-meter supply remains intact, and recent large orders and capacity expansion continue to support growth, but some key projects still face significant uncertainty regarding air, water, natural gas supply, and local approvals. Bloom Energy's stock has gained about 257% over the past year, and the new price target is roughly in line with the current share price. Jefferies therefore believes that even as the company's fundamentals and growth prospects continue to improve, further upside at the current valuation is relatively limited.
Behind-the-meter power logic still holds
Jefferies said Bloom Energy's most important investment thesis remains "behind-the-meter," meaning providing on-site power generation directly to large power customers outside the traditional grid. As AI data center power demand rises rapidly, many projects face lengthy grid connection cycles and slow grid expansion. Bloom Energy's fuel cells can be deployed directly on the customer side, providing relatively fast power supply for data centers and thus bypassing some traditional grid construction bottlenecks. Jefferies believes the difficulties encountered by some recent projects have not weakened this demand logic. The main issues facing the Jupiter and Vineland projects are execution problems such as air permits, water resources, natural gas supply, and local approvals, rather than insufficient customer demand or inability to secure financing.
Large orders and capacity expansion continue to support growth
Several large projects Bloom Energy recently secured also continue to reinforce Jefferies' view on its near- to medium-term growth. Among them, Brookfield has established a cooperation framework with Bloom Energy worth $25 billion, while AEP has signed firm orders worth $2.65 billion. At the same time, Bloom Energy plans to increase capacity to 2 gigawatts by the end of 2026. Jefferies believes these orders and capacity expansion can support the company's near-term revenue growth and also show that large data center customers and infrastructure investors still have strong demand for rapid deployment of on-site power.
Jupiter and other projects remain the main risk points
However, a considerable portion of Bloom Energy's current revenue growth depends on a small number of large projects, making the company's performance more sensitive to the pace of individual projects. The Jupiter project is a typical case. It was originally planned to use Bloom Energy fuel cells to supply power to a large AI data center, but natural gas pipeline construction and local permitting issues have increased the risk of delays. Projects such as Vineland also face varying degrees of approval and infrastructure constraints. Jefferies therefore believes Bloom Energy's biggest risk is no longer whether it can win customers, but whether these large-scale projects can complete approvals, construction, and revenue recognition on the originally planned timeline. Once key projects are delayed, the company's quarterly revenue and order fulfillment pace could fluctuate significantly.
Price target raised, but rating not upgraded further
Jefferies' price target increase this time reflects improved expectations for Bloom Energy's long-term growth potential. The AI data center power shortage continues, behind-the-meter power demand has not weakened, and large customer orders and the 2 gigawatt capacity target provide greater visibility for future growth. On the other hand, Bloom Energy's stock price has already risen sharply over the past year, and the current price is close to Jefferies' new $264 price target. Coupled with revenue concentration in a few large projects, any changes in approvals, natural gas supply, or construction progress could trigger significant stock price volatility. Therefore, Jefferies' current judgment is not that the "growth logic has failed," but that "the growth outlook is stronger, but risk and valuation have already reflected a considerable portion of optimistic expectations." Based on this balance, the firm maintained its Hold rating while raising the price target.
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