The Physical Layer

AI and energy infrastructure, explained plainly.

Research · Initiation · 6 October 2026

Bloom Energy NYSE: BE

Bloom Energy's buyers pay for time. Bloom is paid in volume, and at US$287 the shares already need it.

The call No call
Price at publication
US$286.65close, 5 October 2026
Target
Noneno position at this price
Conviction
Medium

What would prove the thesis wrongBloom's 2027 revenue reaches US$7 billion or more with non-GAAP gross margin of 36 per cent or more, or the shares close above US$360 or below US$200 by October 2027.

What would turn this into a callA price above about US$322 or below about US$210, a 2027 guide in February of less than 40 per cent growth, or product gross margin of 38 per cent or more in two quarters running.

Read the full notePDF, 6 pages: thesis, valuation, scenarios, risks and sources Open the modelExcel, live formulas: change an assumption and the target moves

The call in brief

  1. Bloom Energy makes fuel cells that switch on in months where a grid connection takes years. Oracle plans up to 2.8 GW, AEP has taken most of its 900 MW option, and revenue rose 166 per cent in the second quarter.
  2. The premium is paid in volume, not price: Bloom's product gross margin was 36.8 per cent in 2024, 35.2 per cent in 2025 and 35.6 per cent in the first half of 2026, while revenue tripled.
  3. Volume is set by the Fremont factory, which doubles to 2 GW a year by the end of 2026. At AEP's price of about US$2.9 million a megawatt, the share price needs about 3 GW shipped in 2028.
  4. On fully diluted shares the stock trades at 103 times my 2026 earnings and 48 times my 2028. Forty times my 2028 estimate of US$6.03 gives about US$241, 16 per cent below the price.
  5. Where I was wrong: my September piece called the rising gross margin the time premium. It rose mainly because high-margin products became most of Bloom's revenue, not from pricing, so the claim stands but its margin test is weak.