Key Points
The AI trade got a big boost today.
Updates in the sector were interpreted as good news for Bloom Energy.
Recent selling in AI-related names has knocked Bloom Energy (NYSE:BE) stock down more than 40% from its recent high. But recent updates from companies in the sector have calmed some of Wall Street's AI fears.
That's led to a rebound in Bloom shares, including a big jump today. At 11:23 a.m. ET, Bloom Stock was trading near the morning's high, up 15.6%.
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After neocloud company CoreWeave reported its Q3 results, CEO Michael Intrator told CNBC "Demand for the infrastructure is and remains overwhelming." That means that Bloom's backlog for its fuel cell systems to power that infrastructure likely remains safe. Fears that data center construction in the U.S. could slow or come to a halt after last week's midterm election results look to be premature.
Additionally, Japanese tech conglomerate SoftBank Group announced that it was logging a $3.7 billion loss from advance payments made for power generation equipment initially planned for data center power. The company said design plans changed as the AI infrastructure project progressed. Bloom's fuel cell units are an alternative to that turbine equipment. That could mean even more business for Bloom down the road.
Regardless of that possibility, Bloom's order trajectory remains positive. The company reported record quarterly revenue last month and raised full-year guidance. Investors are returning as worries that the data center boom is ending look overblown.
Howard Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bloom Energy. The Motley Fool has a disclosure policy.