Shares of hydrogen fuel cell maker Bloom Energy(NYSE: BE) were down 10% for the week at market close today, just before the company released its second-quarter results. The only news from the company itself this week before the quarterly report was an announcement of a new, more efficient fuel cell it is offering to help power the growing data center server market.
Power needs are expanding as data centers are built to hold servers used for artificial intelligence (AI) computing needs. But that market isn't yet contributing to Bloom Energy's bottom line.
Are data centers Bloom's new niche market?
Bloom's new efficient fuel cell offering combines much of what data center operators are looking for. While it's highly efficient and carbon-free, using 100% hydrogen, it also offers the ability to run on natural gas and hydrogen blends.
But markets were in risk-off mode for much of this week, and aggressive growth stocks like Bloom Energy were caught in the sell-off. But Bloom has already notched some business to power data centers, and there may be more to come.
In its second-quarter report, the company reported revenue of $335.8 million, an 11.5% year-over-year increase. CFO Dan Berenbaum said, "We delivered record revenue and non-GAAP profitability for a second quarter and strengthened our balance sheet through the issuance of our 3% convertible green notes. We are confident in our commercial pipeline, and we are reaffirming our prior 2024 financial guidance."
The company also recently announced an agreement with privately held AI data center company CoreWeave to supply power for an Illinois data center. The company also will be supplying fuel cells to power Amazon Web Services (AWS) data centers in California.
Investors were initially cheering Bloom's latest quarterly report. The stock is bouncing after market hours in response to the results. That makes sense with record second-quarter revenue combined with increasing profitability in the form of rising gross margins. With electricity demand continuing to rise, Bloom looks to be in a good position, especially in the niche data center market.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Howard Smith has positions in Amazon and Bloom Energy. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
