CoreWeave's upbeat outlook helped calm nerves around the energy company
Good news for the AI trade lifted Bloom Energy's stock on Wednesday.
CoreWeave just sent Wall Street an upbeat signal about the strength of artificial-intelligence demand, and few stocks were benefiting as much as Bloom Energy's.
Shares of Bloom Energy (BE) were rising more than 14% on Wednesday to rank as the second-best performer in the S&P 500 index SPX. The stock was on pace for its best one-day percentage gain in nearly four months, and its highest close in a week.
CoreWeave's (CRWV) commentary around its outlook and backlog boosted tech stocks Wednesday and seemed to have restored investors' faith in the AI trade.
For Bloom, however, the connection went deeper.
Just a week ago, fears of increased data-center regulations hit Bloom's stock hard, as investors worried that Democratic wins in key midterm races would make it harder for companies to build new data centers.
The prospect of an AI slowdown is tricky for Bloom, which has staked its future on providing on-site power generation through fuel cells and other means. Data centers are among its top customers, and optimism about the AI buildout had fueled Bloom's year-to-date stock gains of more than 140%.
"CoreWeave's results go directly at the concern that hit Bloom last week: whether fewer data centers ultimately get funded and built," said Alessio Mastrandrea, an analyst with Bloomberg Intelligence.
The neocloud company raised its revenue outlook, reported a $132.5 billion backlog and highlighted financing backed by customer contracts - all of which point to continued funding for AI infrastructure, Mastrandrea said.
"That matters particularly for Bloom, because CoreWeave is already a customer and speed to power is central to the relationship," he noted.
CoreWeave's results don't immediately remove concerns about project permitting or the risk of higher government scrutiny on data-center projects, but they do ease fears that financing could slow the buildout, Mastrandrea added.
Bloom last month reported better-than-expected third-quarter earnings and raised its outlook. Its latest full-year forecast now implies 122% sales growth, versus a February projection for about half that.
-Claudia Assis
Comments