Bloom Energy Shares Fall 4.50% to $228.56
Bloom Energy shares were down 4.50% at $228.56 at publication Thursday. The article cites rate concerns and pressure across AI infrastructure stocks; Baird raised its price target to $351 from $310 while maintaining an Outperform rating.
Bloom Energy Corp (NYSE: BE ) shares are sliding again Thursday. Rate worries and fresh concerns about AI infrastructure seem to be pressuring data center stocks, even though Baird raised its target. Here’s what you should know. Bloom Energy stock is showing notable weakness.
What’s behind BE decline? Rate Hike Fears Raise Concerns Investors kept dumping stocks related to data centers on Thursday. Rate worries from Wednesday’s inflation report appear to be spilling into today’s session. September’s consumer price index came in at 3.7% year-over-year, a tenth of a point hotter than the 3.6% forecast.
Two-year Treasuries also spiked to 4.91% after an 11-basis-point jump. Oil, at about $96.75 a barrel for WTI futures, added to the strain. According to CME Group’s FedWatch tool, traders see a 27% chance that the Fed raises rates after its October meeting. Pricier loans can force developers to rethink data center, power and commercial projects, which could soften overall demand.
Bloom’s fuel cells supply power to data centers, including Oracle’s Project Jupiter in New Mexico. CoreWeave Bond Yield Spike Pressures AI Complex Chamath Palihapitiya, a venture capitalist, shared a chart showing the yield on $1.25 billion of CoreWeave Inc (NASDAQ: CRWV ) bonds due in 2032 this week. The yield peaked at 15% and settled at 14.5%, the highest closing level to date. Elon Musk responded to the post with one word: “Yikes,” which has added to the pressure on AI infrastructure names.
The jump seems to be rattling AI stocks more broadly, including the companies that build data centers and supply their power. If borrowing stays expensive for AI developers such as CoreWeave, data center construction could slow, along with demand for Bloom’s fuel cells. Firmus Shelves IPO On Weak Demand Firmus, an Australian data center operator backed by Nvidia, pulled its planned $5 billion IPO on Oct. 9 because buyers showed little interest, Reuters reported.
That reluctance points to growing selectivity on AI infrastructure funding, which could make raising capital harder for the projects Bloom supplies. Gartner Warns Most Neoclouds Could Fold by 2030 A Wednesday Gartner report warns that AI revenue will fall far short of AI infrastructure spending, putting over 80% of neocloud providers at risk by 2030. Gartner says more than $3.5 trillion of that spending could face write-downs, which could delay buildouts and hurt orders for power equipment.
Baird Raises Bloom Energy Price Target to $351 On a positive note, Baird analyst Ben Kallo kept an Outperform rating on Bloom Energy on Thursday and raised the price target to $351 from $310. Kallo’s latest note walks through “Blue Sky” scenarios for Bloom’s earnings power if the company scales annual production capacity to 6, 8 or 10 gigawatts. Kallo called volume the biggest source of potential upside. Valuation is the sticking point for some investors, Kallo acknowledged, but Baird still sees room for gains if Bloom expands output.
BE Shares Are Slipping BE Price Action: Bloom Energy shares were down 4.50% at $228.56 at the time of publication on Thursday, according to Pro. Read Also: CRWV, NBIS, IREN in Focus: Gartner Warns 80% of Neoclouds Will 'Cease Independent Operations' by 2030 Image: Golden Dayz/Shutterstock