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AI Power Crunch: Why Bloom Energy Is the Hidden Winner
Authored by Jeffrey Neal Johnson. Published: 2/11/2026.
In Brief
- Bloom Energy offers data centers a rapid power solution and efficient architecture that successfully bypasses traditional utility grid delays.
- Strategic partnerships with major asset managers and utilities have validated the technology and secured a massive backlog of future product orders.
- The company has achieved operating profitability while favorable government legislation provides long-term certainty for tax credits and expansion.
For the past two years, the stock market has been obsessed with the brains behind the artificial intelligence (AI) revolution. Investors poured billions into companies designing advanced chips and building large language models, driving valuations to historic highs. However, while the market focused on computing power, a massive physical bottleneck quietly emerged: electricity supply constraints that now threaten to slow the industry's pace.
The U.S. electrical grid is aging, congested and struggling to meet modern demand. In major data center hubs like Northern Virginia and Silicon Valley, interconnection queues (the waiting list to connect new commercial facilities to the power grid) now stretch three to five years. Those delays are catastrophic for technology giants.
Silicon Valley insiders hint at 12-month AI warning (Ad)
Almost no one sees it coming, but AI is about to split America into two over the next 12 months. On one hand, it'll make America's one-percenters richer and more powerful than ever. On the other hand, it's set to trap millions of hardworking Americans in financial quicksand. Former Google exec Kai-Fu Lee says AI could wipe out 50% of jobs by 2027. Elon Musk has said AI will surpass human intelligence by 2027. Mark Zuckerberg has said half of all coding could be done by AI within the next year. One ex-hedge fund manager whose team predicted Nvidia's rise in 2020 calls this the AI End Game, and he says there are three critical moves every American should make in the next 12 months to protect and grow their wealth through this paradigm shift.
See the three moves before the AI split happensThese companies need to bring billions of dollars of AI chips online immediately to remain competitive. An AI data center cannot function without massive, continuous and reliable power, and the traditional utility model is failing to keep up.
Enter Bloom Energy (NYSE: BE). Once viewed primarily as a speculative bet on a future hydrogen economy, Bloom has pivoted its business model to address this immediate crisis. It is no longer just a clean energy company; it is a critical infrastructure provider offering a rapid time-to-power solution that bypasses the utility grid entirely.
Wall Street is waking up to this new reality. The stock has risen roughly 489% over the past year as investors recognize Bloom provides the physical heartbeat required to keep the AI revolution running. The company's recent fourth-quarter earnings reinforced this momentum, reporting earnings per share (EPS) of $0.45 versus analyst expectations of $0.25.
The Competitive Moat: Speed and Physics
The primary reason Bloom is winning contracts over traditional utilities is simple: speed. In the high-stakes world of AI, time is money. Every month a data center sits idle waiting for a power connection represents millions of dollars in lost revenue and lost market share.
Traditional utilities often require years to upgrade transmission lines and substations to support a new hyperscale facility. Bloom offers a workaround: by installing its solid-oxide fuel cells on-site, it effectively turns a data center into its own independent power plant. During the recent earnings call, CEO KR Sridhar said the company deployed a hyperscale AI factory order in just 55 days. That contrasts with the 90-day deployment window Bloom typically offers and the multi-year waits common with traditional grid connections.
Beyond speed, Bloom holds a distinct engineering advantage rooted in physics. The traditional electrical grid delivers power as alternating current (AC), while computer chips and server racks run on direct current (DC). Connecting a data center to the grid requires expensive, heavy and inefficient equipment to convert AC to DC. That conversion wastes energy as heat, which then requires additional energy to cool.
Bloom's Energy Servers generate electricity natively in DC. The company's 800-Volt DC architecture allows its fuel cells to connect directly to AI server racks, creating a streamlined power architecture that eliminates multiple conversion steps and reduces the need for massive transformers and conversion equipment. The result is a system that is more energy-efficient, produces less waste heat and occupies a smaller physical footprint—an important advantage where floor space is premium real estate.
Institutional Validation: The $20 Billion Backlog
The shift from a niche energy product to essential infrastructure is confirmed by the caliber of contracts Bloom is signing. The technology is being deployed at an industrial scale by some of the largest capital allocators in the world.
In late 2025, Bloom announced a strategic partnership with Brookfield Asset Management. Brookfield established a $5 billion financing framework specifically to deploy Bloom's fuel cells, providing a vote of confidence from a major institutional investor and a funded pathway to scale. Critically, this arrangement lets Bloom deploy units without leveraging its own balance sheet for every project, preserving capital for manufacturing expansion.
Utilities are also recognizing they cannot meet demand alone. American Electric Power (NASDAQ: AEP), one of the largest utility companies in the U.S., signed a supply agreement for up to 1 gigawatt (GW) of solid-oxide fuel cells. That deal signals a shift in the utility mindset: rather than viewing on-site generation as competition, major utilities are partnering with Bloom to solve capacity constraints.
Further validation comes from the tech sector. Bloom's collaboration with Oracle (NYSE: ORCL) to power AI data centers included warrants for Oracle to purchase more than 3.5 million shares of Bloom stock, aligning a major customer with Bloom's financial success. These strategic wins have driven the company's product backlog to about $6 billion, a 140% year-over-year increase. When combined with long-term service agreements, the total backlog now sits near $20 billion, giving high visibility into future revenue.
Growth, Guidance, and Government Support
The financial data supports the bullish narrative. Bloom finished fiscal year 2025 (FY2025) with record revenue of $2.02 billion, a 37% increase over the prior year. Management projects revenue for FY2026 to range between $3.1 billion and $3.3 billion—implying year-over-year growth above 50% if achieved.
Importantly, the company has moved toward profitability. For FY2025, Bloom reported non-GAAP operating income of $221 million, distinguishing it from many peers in the clean energy space, such as Plug Power (NASDAQ: PLUG), which continues to struggle with cash burn and negative margins. Bloom has demonstrated the ability to grow its top line while maintaining fiscal discipline.
Investors also benefit from a more predictable policy environment. The One Big Beautiful Bill Act (OBBBA), passed in 2025, reinstated a 30% Investment Tax Credit (ITC) for fuel cells. That credit applies regardless of the fuel source—whether a customer runs their Bloom Box on natural gas today or transitions to hydrogen tomorrow—and is available for projects starting construction through the end of 2033. This decade-long certainty allows customers to sign large, multi-year contracts without worrying about sudden policy changes.
Scaling for the Future: A Derivative AI Trade
Bloom Energy has effectively decoupled itself from the volatile and often unprofitable clean energy cohort to become a derivative play on artificial intelligence infrastructure. The company faces the operational challenge of doubling its Fremont, Calif., manufacturing capacity to 2 GW by the end of 2026, but it is well-capitalized to execute that plan. Bloom ended 2025 with a strong balance sheet and about $2.5 billion in cash.
The business model also contains a powerful recurring-revenue engine: every product sold carries a 100% attachment rate to long-term service contracts. As the installed base grows, so does a steady stream of high-margin service revenue, creating a compounding financial foundation.
For investors seeking exposure to the AI boom without paying the premium valuations of chip manufacturers, Bloom Energy offers a compelling alternative. It supplies the physical infrastructure necessary to keep the digital revolution running. As long as data centers need power faster than the grid can provide it, Bloom is well-positioned to grow.
Amid the "SaaS Apocalypse", These 3 Names Are Boosting Buybacks
Authored by Leo Miller. Published: 2/16/2026.
In Brief
- The massive decline in software stocks, dubbed the "SaaS Apocalypse," has left many names deeply in the red during 2026.
- However, three software names are expressing confidence going forward, increasing their buyback capacity.
- Two names now have buyback authorizations equal to 9% or more of their market caps.
To the frustration of many investors, the rout in software stocks has yet to ease. The iShares Expanded Tech-Software Sector ETF (BATS: IGV), a common proxy for the industry, is down nearly 22% in 2026.
Amid this weakness, several software companies are taking a confidence-inspiring step: announcing share buyback authorizations. For these beaten-down names, management teams are signaling a belief that their shares are undervalued.
DT: Keeping a Lid on 2026 Losses and Boosting Buyback Capacity
Silicon Valley insiders hint at 12-month AI warning (Ad)
Almost no one sees it coming, but AI is about to split America into two over the next 12 months. On one hand, it'll make America's one-percenters richer and more powerful than ever. On the other hand, it's set to trap millions of hardworking Americans in financial quicksand. Former Google exec Kai-Fu Lee says AI could wipe out 50% of jobs by 2027. Elon Musk has said AI will surpass human intelligence by 2027. Mark Zuckerberg has said half of all coding could be done by AI within the next year. One ex-hedge fund manager whose team predicted Nvidia's rise in 2020 calls this the AI End Game, and he says there are three critical moves every American should make in the next 12 months to protect and grow their wealth through this paradigm shift.
See the three moves before the AI split happensFirst is observability-platform provider Dynatrace (NYSE: DT). The company's software helps customers monitor the performance of mission-critical applications, identifying bottlenecks and other issues so they can be fixed quickly.
Dynatrace shares have held up better than many peers in 2026, down only about 14%. That resilience followed a quarter in which it beat sales and adjusted EPS estimates, and the stock rose about 7% on the results. Still, shares remain roughly 40% below their 52-week high.
Dynatrace also announced a significant $1 billion share-repurchase authorization—about 9% of its roughly $11 billion market capitalization. That authorization is double the size of the company's prior program from May 2024, when the shares traded at a considerably higher price. Management said the new buyback underscores "the view that our shares are undervalued."
PEGA's Buyback Capacity Soars Above 10% of Its Market Cap
Pegasystems (NASDAQ: PEGA) has not fared as well as Dynatrace in 2026, with shares down about 26% year to date. The company provides business-process-management software that helps clients automate internal workflows, and its GenAI Blueprint tool lets companies build or improve tools with minimal coding.
Positioning itself to benefit from AI-driven changes to software development, Pega beat sales and adjusted EPS estimates in its most recent quarter. Despite that, shares fell nearly 12% after the report, as the company's 2026 guidance left some investors underwhelmed.
Pegasystems announced an additional $1 billion buyback authorization—equivalent to about 13.5% of its roughly $7.4 billion market cap. The company said only that "this authorization reflects our confidence in the durability of our cash flows and our commitment to disciplined capital allocation." Still, the program's size relative to market cap suggests management sees meaningful upside in the stock.
Down 30% in 2026, SHOP Announces $2 Billion Buyback Plan
Finally, e-commerce platform Shopify (NASDAQ: SHOP) has been a larger loser in 2026, down roughly 30%. Shopify's tools enable businesses to build and operate direct-to-consumer e-commerce stores, and the company has delivered sustained revenue growth.
Shopify has posted year-over-year revenue growth of 20% or more for 14 consecutive quarters, and it beat sales and earnings estimates in its latest report. Even so, the stock fell more than 6% on each of the two trading days that followed the announcement.
The company unveiled a $2 billion buyback authorization. While larger in absolute terms than the programs at DT and PEGA, it represents only about 1.4% of Shopify's roughly $146 billion market capitalization. Still, the move is notable: there appears to be no public record of Shopify previously announcing a share buyback plan, so this signals a new willingness to return capital.
Buybacks: One Positive Indicator Amid Software's Stumble
These buybacks are a constructive signal that management teams believe their shares are undervalued. However, investors should remain mindful of the broader challenges facing the software industry.
Markets are increasingly concerned that the rise of new artificial-intelligence tools could limit growth for incumbents or compress margins, and those headwinds may persist as AI tooling becomes more widespread. For investors considering attempts to "buy the dip" in software stocks, selectivity and careful analysis remain essential.
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