Bloom Energy stock fell more than 10% on Monday, trading around $207, and extended a pullback that has left the shares 39% below their all-time high of $351.28.

The decline is prompting renewed questions for investors who had benefited from a 360% gain over the past 12 months. Bloom Energy Corporation, BE, is a San Jose, California-based manufacturer founded in 2001 that listed on the New York Stock Exchange in 2018. Its solid oxide fuel cells convert natural gas or hydrogen into electricity through an electrochemical reaction, without combustion. The stock reached a 52-week low of $40.56 in August 2025. An investment of $2,000 at that low would have been worth roughly $11,647 as of last week, even before Monday’s drop.

Earnings beat, but the stock still sold off

Bloom reported second-quarter 2026 results on July 28. Earnings per share came in at $0.78, compared with an estimate of $0.40, a 95% beat. Revenue totaled $1.06 billion, above the $815.6 million consensus estimate by 30%. Revenue rose 91% year over year.

Despite the strong report, the stock fell nearly 13% after earnings.

That reaction suggests a “sell the news” pattern, where expectations had already become so elevated that even a strong quarter was not enough to drive the stock higher.

Bloom has now beaten earnings estimates in four consecutive quarters by an average of 95%. In the previous quarter, first-quarter 2026, the stock rose 22.71% after a 238% EPS beat.

Management also raised full-year 2026 revenue guidance to $3.9 billion to $4.2 billion, up from $3.4 billion to $3.8 billion. The midpoint of that range would imply nearly 100% year-over-year growth.

Valuation remains the key concern

The main issue for the stock is valuation. BE trades at 279 times trailing earnings and 77.7 times forward earnings. Its price-to-sales ratio is 22 times, a software-like multiple for a hardware business that is reporting 29.6% gross margins.

One fair value model places the stock at $117.24, roughly 45% below the current share price.

Bloom also carries a debt-to-equity ratio of 174.6%, which is high for a capital-intensive manufacturer. The stock’s beta is 3.83, meaning it tends to move about 3.8 times as much as the broader market in either direction. A 10% decline in a single session is therefore notable, but not unusual for the name.

AI data center demand supports the bull case

The bullish argument is tied to real demand. Bloom makes solid oxide fuel cells that generate on-site power for data centers, reducing dependence on the grid. That value proposition has gained urgency as power availability becomes a bottleneck for AI buildouts: the International Energy Agency projected in April 2025 that global data center electricity consumption could roughly double by 2030, grid interconnection waits in key U.S. markets can stretch for years, and order books for the incumbent alternative, gas turbines, are backlogged well into the late 2020s. The customer base also extends beyond tech companies — utility American Electric Power announced an agreement in late 2024 to procure up to 1 gigawatt of Bloom fuel cells.

With AI infrastructure spending accelerating, Bank of America recently lifted its hyperscaler capital expenditure forecast to $3.6 trillion through 2028.

In Bloom’s second-quarter press release, CEO KR Sridhar said all major U.S. hyperscalers and more than a dozen AI labs and colocation operators have approved Bloom’s power solutions. “Bloom is now a standard for AI onsite power,” he said.

EPS estimates have been revised higher by 191.75% over the past year. The company’s next earnings report is scheduled for October 29. That report, along with any new order announcements from hyperscalers or utilities in the meantime, will provide the next concrete data points on order momentum and margin trajectory, the variables at the center of the debate between Bloom’s AI-driven demand story and its valuation risk.

The monthly ADX reading stands at 60.5, indicating that the long-term trend remains strong despite the recent pullback.