According to Goldman Sachs projections, U.S. data center power demand could more than double from 31 gigawatts in 2025 to 66 gigawatts by 2027. BloombergNEF also estimates that data centers could account for 20% of U.S. electricity consumption by 2035. That would mark almost a four times increase in data center power consumption from current levels. AI workloads are driving the power demand.
However, utilities and gas-turbine companies are struggling to keep up with surging electricity demand. This situation is frustrating data center operators because of the extended wait to get a grid connection, which can take years. Faced with this situation, data center operators are turning to distributed power solutions, as these can be deployed more quickly. For instance, fuel-cell power systems can be up and running in a matter of weeks.
Bloom Energy Corporation (NYSE:BE) is one of the providers of fuel-cell power systems, and the company is benefiting from the growing demand for distributed power solutions. This translated to record revenue in the latest quarter and contributed to strong order backlog and margins improvements.
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Bloom Energy Translates AI-Driven Demand Into Solid Financial Performance
Bloom Energy’s revenue more than doubled year-over-year to a record $1.07 billion in Q2 2026. That smashed the Street’s estimate of $826.1 million. Adjusted EPS of $0.78 was nearly double the $0.41 that analysts expected.
On the back of the solid Q2 results, Bloom raised its full-year 2026 outlook again. It now projects revenue to come in the range of $3.9 billion to $4.2 billion. It anticipates adjusted EPS in the band of $2.55 to $2.85.
Notably, Bloom Energy Corporation (NYSE:BE) has raised its annual sales outlook twice this year. It started with guidance of $3.1 billion to $3.3 billion in February. It raised it to $3.4 billion to $3.8 billion in April, and now raised it again the second time this year. This indicates management’s growing confidence in demand.
The company’s management has highlighted expanding demand from hyperscalers, neocloud providers, colocation data-center operators, and AI laboratories. Bloom has noted that its backlog is growing faster than revenue.
Compared to conventional gas turbine providers, Bloom has an edge in deployment speed. And this is helping it win over customers looking to avoid lengthy waits, such as its 2.8-gigawatt agreement with Oracle Corporation (NYSE:ORCL).
Despite its strengths, Bloom faces certain risks. The company’s growth is tied to expanding data center capex. That means any slowdown in AI infrastructure spending could affect demand for its power solutions. Policy changes affecting clean-energy incentives and increasing competition could also weigh on the company’s long-term growth.
How Bloom Energy Compares With FuelCell Energy
Bloom Energy Corporation (NYSE:BE) and FuelCell Energy, Inc. (NASDAQ:FCEL) are both exposed to the AI-driven distributed power demand. Nevertheless, their financial performance highlights different stages of commercialization.
Bloom has demonstrated improving profitability. Its gross margin expanded from 30% in Q1 to 33.4% in Q2. The company reported a 29% gross margin for full-year 2025. FuelCell Energy, on the other hand, reported gross margins of -19.2% in its fiscal Q1 ended January, -36.3% in its fiscal Q2 ended April, and -16.7% for fiscal 2025. FuelCell Energy appears to be struggling to grow its business profitably.
Bloom and FuelCell Energy, Inc. (NASDAQ:FCEL) are also apart from a cash generation standpoint. Bloom has made significant progress toward positive free cash flow, while FuelCell Energy remains cash-flow negative.
How Hedge Funds Are Positioning Around Bloom Energy
Elite investors are becoming more optimistic about Bloom. The number of hedge funds holding Bloom increased to 91 in Q1 from 88 in the prior quarter. By comparison, hedge fund holders in FuelCell Energy declined to 22 from 23 over the same period.
Some of Bloom’s largest hedge fund investors boosted their exposure to the stock during Q1. Value Aligned Research Advisors increased its stake by 32% to $621.2 million, Two Sigma Advisors boosted it by 171% to $480.7 million, and Whale Rock Capital Management raised it by 24% to $224.1 million.
Bearish positioning reveals a more favorable investor sentiment toward Bloom compared to FuelCell Energy, Inc. (NASDAQ:FCEL). As of July 15, Bloom’s short interest stood at 6.95%, against FuelCell Energy, Inc. (NASDAQ:FCEL)’s 23.62%.
Is Bloom Energy’s AI-Driven Momentum Strengthening the Investment Case?
Bloom Energy’s latest results underscore the company’s opportunity in the expanding AI data center power market. The company delivered record quarterly revenue, and its order book and gross margin expanded. This led management to lift the 2026 revenue guidance for the second time.
There is no doubt that Bloom faces execution, policy, and competitive risks. However, the company has demonstrated remarkable ability to translate demand into strong financial performance. Furthermore, growing hedge fund interest and lower short interest strengthen its long-term investment case.
While we acknowledge the risk and potential of BE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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