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AI Power Crunch: Why Bloom Energy Is the Hidden Winner
By Jeffrey Neal Johnson. Publication Date: 2/11/2026.
What You Need to Know
- Bloom Energy offers data centers a rapid power solution and efficient architecture that successfully bypasses traditional utility grid delays.
- Strategic partnerships with major asset managers and utilities have validated the technology and secured a massive backlog of future product orders.
- The company has achieved operating profitability while favorable government legislation provides long-term certainty for tax credits and expansion.
For the past two years, the stock market has been obsessed with the brains of the artificial intelligence (AI) revolution. Investors poured billions into companies designing advanced chips and building large language models, driving valuations to historic highs. While the market focused on computing power, a massive physical bottleneck has quietly emerged that now threatens to derail the industry: a growing shortage of reliable electricity.
The U.S. electrical grid is aging, congested, and struggling to meet modern demand. In major data center hubs like Northern Virginia and Silicon Valley, interconnection queues — the waiting lists to connect new commercial facilities to the power grid — now stretch three to five years. Those delays are potentially catastrophic for technology giants.
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These companies need to bring billions of dollars' worth of AI chips online quickly to remain competitive. An AI data center cannot operate without massive, continuous, and reliable power, and the traditional utility model is not keeping pace.
Enter Bloom Energy (NYSE: BE). Once viewed primarily as a speculative bet on a future hydrogen economy, Bloom has pivoted its business model to address this immediate crisis. It is no longer just a clean energy company; it has become a critical infrastructure provider offering a rapid time-to-power solution that can bypass the utility grid.
Wall Street is taking notice. The stock has risen roughly 489% over the past year as investors recognize that Bloom supplies the physical heartbeat required to sustain the AI buildout. The company's recent fourth-quarter earnings reinforced this momentum: Bloom delivered earnings per share (EPS) of $0.45, comfortably beating analyst expectations of $0.25.
The Competitive Moat: Speed and Physics
Bloom's primary advantage over traditional utilities comes down to one metric: speed. In the high-stakes world of AI, time is money. Every month a data center sits idle waiting for a power connection represents millions in lost revenue and eroded market position.
Utilities often need years to upgrade transmission lines and substations to support a new hyperscale facility. Bloom offers a practical workaround by installing its solid-oxide fuel cells on-site, effectively turning a data center into its own independent power plant. On the recent earnings call, CEO KR Sridhar said the company deployed a hyperscale AI factory order in just 55 days — well under Bloom's typical 90-day commitment and orders of magnitude faster than standard grid connections.
Beyond speed, Bloom holds an engineering edge rooted in physics. The traditional electrical grid distributes power as Alternating Current (AC), while computer chips and server racks run on Direct Current (DC). Connecting a data center to the grid requires expensive, heavy, and inefficient equipment to convert AC into DC. That conversion wastes energy as heat, which then requires additional cooling.
Bloom's Energy Servers generate electricity natively in DC. Its new 800-Volt DC architecture lets fuel cells connect directly to AI server racks, eliminating multiple conversion steps and the need for massive transformers and rectifiers. The result is a more energy-efficient system that produces less waste heat and occupies a smaller physical footprint — an important advantage where floor space is premium.
Institutional Validation: The $20 Billion Backlog
The shift from a niche product to essential infrastructure is reflected in the caliber of contracts Bloom is signing. The technology is being deployed at industrial scale by some of the largest capital allocators in the world.
In late 2025, Bloom announced a strategic partnership with Brookfield Asset Management, which established a $5 billion financing framework to deploy Bloom's fuel cells. That deal is a strong vote of confidence from institutional investors and gives Bloom a funded pathway to scale without having to use its own balance sheet for every project, preserving capital for manufacturing expansion.
Utilities, too, are adapting. American Electric Power (NASDAQ: AEP) signed a supply agreement for up to 1 Gigawatt (GW) of solid oxide fuel cells, signaling a shift in mindset: rather than seeing on-site generation as competition, major utilities are partnering with Bloom to alleviate capacity constraints.
Bloom's collaboration with Oracle (NYSE: ORCL) to power AI data centers included warrants for Oracle to purchase more than 3.5 million shares of Bloom stock, aligning customer and shareholder interests. These strategic wins have pushed Bloom's product backlog to roughly $6 billion — a 140% year-over-year increase — and, when combined with long-term service agreements, the total backlog now sits at about $20 billion. That provides high visibility into future revenue.
Growth, Guidance, and Government Support
Financial data supports the bullish case. Bloom Energy closed fiscal year 2025 (FY2025) with record revenue of $2.02 billion, up 37% year over year. Management projects FY2026 revenue between $3.1 billion and $3.3 billion, which would represent growth exceeding 50% if achieved.
Importantly, the company has improved profitability. For FY2025, Bloom reported non-GAAP operating income of $221 million — a milestone that distinguishes it from many peers in the clean energy space, such as Plug Power (NASDAQ: PLUG), which continues to struggle with cash burn and negative margins.
Investors also benefit from a more stable policy backdrop. The One Big Beautiful Bill Act (OBBBA), passed in 2025, reinstated a 30% Investment Tax Credit (ITC) for fuel cells that applies regardless of fuel source. Whether a customer runs a Bloom Box on natural gas today or transitions to hydrogen later, they qualify for the credit. The ITC applies to projects beginning construction through the end of 2033, creating a long-term floor for customer returns and making it easier to sign large, multi-year contracts with confidence.
Scaling for the Future: A Derivative AI Trade
Bloom Energy has shifted from a volatile clean-energy story to a derivative play on the AI buildout. The company faces the operational challenge of doubling its Fremont, California, manufacturing capacity to 2 GW by the end of 2026, but it finished 2025 with a strong balance sheet, holding about $2.5 billion in cash.
Its business model also includes a powerful recurring revenue engine: every product sale comes with a 100% attachment rate to long-term service contracts. As the installed base grows, so does the steady stream of high-margin service revenue, creating a compounding financial foundation.
For investors seeking exposure to the AI boom without paying the premium valuations of chip makers, Bloom Energy presents a compelling alternative. It delivers the essential physical infrastructure that keeps the digital revolution running. As long as data centers need power faster than the grid can provide it, Bloom is well positioned to grow.
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