Bloom Energy Stock Fell 16% on the Same Day 2 Giant Data Center Deals Named It. Is It a Buy?
Only one of the two deals is new business. Is the stock's drop an opening?
On November 5, Bloom Energy (BE) experienced a 16% drop in stock price amidst reports of two large data center deals. NTT DATA had agreed to deploy 900 megawatts of Bloom's fuel cell technology for data center projects globally, while Google confirmed it would build a 702-megawatt plant near Cheyenne, Wyoming. The latter deal, although not a new one, is backed by a 20-year power purchase agreement with American Electric Power, valued at around $4 billion.
This order, which had already been secured in January for a $2.65 billion investment, is crucial for Bloom's revenue forecast. Despite the setback, Bloom's year-to-date growth remains strong at over 90%, trading at approximately 31 times earnings on next year's expected earnings. However, potential slower data center growth in the U.S. could impact future deliveries, making this a cautiously optimistic view on the stock.
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