Bloom Energy and the $632 Billion AI Energy Rush

AI Spending ExplodesIn March 2023, Microsoft (MSFT) founder Bill Gates wrote, “In my lifetime, I’ve seen two demonstrations of technology that struck me as revolutionary.” Gates, writing on his website, referred to the graphical user interface he witnessed in 1980, which would eventually be the ingredient needed for every modern operating system, including Windows. The second technological innovation that Gates referred to was OpenAI’s large language model (LLM) powered Chatbot, ChatGPT. Gates had asked his contacts to train the model to take and pass an AP Bio exam (Picking AP Bio because it required deep analysis, not simply memorization of facts). To his surprise, OpenAI’s ChatGPT did not only pass the 60-question multiple choice exam but also answered 59 of the 60 questions correctly.Though large language models like ChatGPT are still being refined and “trained,” it is becoming abundantly clear to the world’s sharpest technologists that the next wave of innovation and growth can be harnessed through artificial intelligence. That’s why cash-rich “Magnificent 7” tech juggernauts like Meta Platforms (META) and Microsoft are spending billions of dollars on Nvidia (NVDA) chips and data centers to gain AI supremacy. According to IDC Research, worldwide AI spending will double by 2028 to a mind-numbing $632 billion, resulting in a compound annual growth rate (CAGR) of ~29%.Data Center Energy Consumption ProjectionsCurrently, AI is dominated by Mag 7 names due to the startup costs, such as GPUs and data centers, which are astronomical. However, the spending doesn’t stop once a data center is constructed. Data centers require massive quantities of electricity. In December 2024, the US Department of Energy (DOE) released a report stating that data center energy usage will “double or triple by 2028” (after doubling over the past decade. With an already vulnerable and overworked energy grid, big tech companies will be forced to source their own energy needs. Below are two reasons the energy sector is in the “sweet spot” over the next four years:·       Supply & Demand: The US electric grid is near capacity, and The Electricity Reliability Council of Texas (EROC) was even forced to pay Bitcoin miner Riot Platforms (RIOT) more than $30 million to limit its electricity usage during a recent heat wave. Meanwhile, demand from data centers is increasing rapidly.·       Regulatory-Friendly Environment: Last night, President Donald Trump wasted no time rolling out his energy-friendly agenda. Trump immediately declared a “National Energy Emergency” via an executive order that details the nation’s “inadequate energy supply and infrastructure.” In this executive order, Trump will ease restrictive regulations for energy producers.BE: Serving the Here and NowBE Company OverviewZacks Rank #2 (Buy) stock Bloom Energy (BE) leverages natural gas and other fuels to create electricity through chemical reactions. BE’s technology helps data center operators and other businesses generate their own clean energy without needing to rely on the traditional electrical grid. As natural gas prices and the United States Natural Gas ETF (UNG) soar, BE is uniquely positioned to exploit the current market environment.Mega-Deal Injects Life into Bloom EnergyOn November 15th, BE shares skyrocketed some 59% after the company announced a mega deal to supply up to 1 gigawatt of fuel cells to electricity utility American Electric Power (AEP). AEP will deploy fuel cells to AI data centers, which will potentially generate more orders in 2025. On the back of the deal, shares are set up in a rare but powerful high-tight flag pattern. Meanwhile, today, AI powerhouse Microsoft said it is open to using natural gas to power AI data centers to keep up with demand.Bloom Energy Bucks the Market Weakness, Outperforms PeersOne of the most straightforward ways to identify a leader in an industry is to analyze it relative performance compared to the market and its peers. While AI energy industry peers like Constellation Energy (CEG) and Oklo (OKLO) have (understandably) succumbed to the market weakness, BE has merely chopped sideways – a show of relative strength.Image Source: Zacks Investment ResearchWall Street Analysts are Bullish on Bloom EnergyFinally, Zacks Consensus Estimates suggest that Wall Street analysts are bullish on Bloom Energy for the foreseeable future. These analysts anticipate that EPS will jump a healthy 35.71% in 2025 and 89.21% in 2026.Image Source: Zacks Investment ResearchBottom LineThe convergence of explosive AI spending and a shifting regulatory landscape creates a unique opportunity for Bloom Energy. Positioned to capitalize on the need for decentralized, reliable power, Bloom Energy stands to benefit significantly from the AI revolution’s insatiable energy appetite.   Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Microsoft Corporation (MSFT): Free Stock Analysis Report Constellation Energy Corporation (CEG): Free Stock Analysis Report American Electric Power Company, Inc. (AEP): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Riot Platforms, Inc. (RIOT): Free Stock Analysis Report United States Natural Gas ETF (UNG): ETF Research Reports Bloom Energy Corporation (BE): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report Oklo Inc. (OKLO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks