Bloom Energy stock falls after analyst warns of over 60% downside

Investing.com -- Bloom Energy (NYSE: BE) stock fell 15% after Jefferies downgraded the fuel cell company to Underperform from Hold, setting a price target of $31. The target suggests 64% downside from yesterday’s closing print.

The significant drop comes amid a remarkable year for Bloom Energy, with shares up over 200% YoY before today’s pullback. The stock, which closed at $86.27 yesterday, traded down to $66 following the downgrade.

Jefferies analyst Dushyant Ailani cited valuation concerns in the downgrade, raising the price target from $24 to $31 but still suggesting substantial downside from current levels.

"BE is indeed a leader in a promising niche, with many bullish assumptions facing practical constraints. Given the limited visibility into post-2026 growth and some early signs of over-exuberance, we find that risks to the downside outweigh further upside at the current levels," Ailani wrote in his note.

The downgrade comes just days after Morgan Stanley took a more optimistic view, raising its price target to $85 from $44 while maintaining an Overweight rating. Morgan Stanley’s bullishness was tied to Bloom’s potential in the AI data center power market, particularly following the company’s July agreement to power Oracle AI data centers with its fuel cells.

Oracle recently announced bookings that exceeded expectations, with its backlog increasing by $317 billion sequentially to nearly $0.5 trillion, which had previously bolstered investor confidence in Bloom’s growth prospects.

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