Bloom Energy’s rich valuation has run ahead of its valuation

Investing.com --Jefferies cut its rating on Bloom Energy to Underperform from Hold, warning that investor enthusiasm has run ahead of fundamentals and that growth beyond 2026 remains uncertain.

Bloom Energy’s stock surge has turned it into one of the most visible beneficiaries of the AI-driven data center boom.

Bank of America has also said fundamentals do not support its valuation. And hacked its price target to $24, far below $86.

Jefferies has a $31 price target, saying the stock’s current valuation implies aggressive expansion that may be hard to achieve.

Bloom trades at about 31 times estimated 2027 EBITDA, compared with about 20 times for hyperscalers and grid equipment peers, Jefferies said.

“Given the limited visibility into post-2026 growth and some early signs of over-exuberance, we find that risks to the downside outweigh further upside at the current levels,” the analysts wrote.

The brokerage noted that even with deliveries from American Electric Power of 300 megawatts and from Oracle of 200 MW, Bloom would still fall about 620 MW short of what would be needed to fully utilize its current 2 GW product capacity.

Jefferies said it does not expect Bloom to reach 1 GW of annual sales in the near term and estimates it will hit 1.3 GW only by 2029.

Bloom’s rapid deployment of fuel cells, 90 days for deliveries up to 50 MW, has impressed investors, but Jefferies said infrastructure constraints such as pipeline buildouts limit the pace of adoption.

The firm pointed to AEP’s Ohio project, where fuel cells cannot be used until a gas pipeline is ready in 2027.

Jefferies added that while Bloom’s partnerships with major customers such as Oracle help meet near-term guidance, the deals announced so far remain modest in scale.

The next significant catalyst will likely come in February 2026, when Bloom discloses its backlog.