Bloom Energy Shares Surge on Major Data Center Deal, Sparking Valuation Concerns

Bloom Energy’s stock is experiencing a powerful upward trajectory, with its shares climbing more than 40% since the start of the year and consistently reaching new all-time highs. This rally is fueled by a multi-billion dollar order that significantly strengthens the company’s position within the rapidly expanding market for artificial intelligence (AI) data center infrastructure. However, the stock’s dramatic appreciation is now drawing scrutiny from market observers concerned about its stretched valuation.

A Landmark Order for Fuel Cell Technology

The catalyst for the recent sharp price movement is an expanded partnership with utility giant American Electric Power (AEP). In a deal valued at approximately $2.65 billion, AEP has ordered solid-oxide fuel cells from Bloom Energy with a total capacity of 900 megawatts.

Market participants view this agreement as a major validation of Bloom’s technology. As the construction of traditional power grids often faces years-long delays, these fuel cells are seen as a rapidly deployable solution to meet the skyrocketing energy demands of AI computing facilities. Analysts have characterized the order as one of the first large-scale projects of its kind, demonstrating the practical scalability of the fuel cell approach for modern energy needs.

Should investors sell immediately? Or is it worth buying Bloom Energy?

Institutional Confidence Meets Technical Caution

Despite the clear operational win, some experts are urging investors to exercise caution. Analysts at BMO Capital maintained their “Market Perform” rating on the stock, highlighting a potential disconnect in its valuation. They suggested the current share price appears to be pricing in a nearly flawless execution of the company’s strategy for the coming years. From a technical analysis perspective, the stock is also flashing warning signs, with a Relative Strength Index (RSI) reading of 92.1 indicating it is deeply in overbought territory.

Concurrently, institutional interest remains strong. Recent SEC filings reveal that Elemental Capital Partners established a new position in the third quarter, accumulating about 1.2 million shares worth over $100 million. This holding now represents the largest position in the firm’s investment portfolio.

All eyes are now turning to February 2026, when Bloom Energy is scheduled to report its quarterly results. The company will need to demonstrate that its fundamental financial performance can justify the extraordinary share price appreciation of over 540% witnessed in the past twelve months.