Morgan Stanley has it right.

The entire Sell Side should be talking about the Bull case in Bloom Energy Corp (BE), but they cannot as they have been burned by the company and the stock since Day 1 of coming public.

BEFORE the AEP deal, if one took the time to study the last earnings call notes from Bloom, discerning investors will have noted:

• An incredible step up in N America outside of Data Center, in its core industrial and commercial vertical. This reminds us of how Powell saw its seminal inflection point spread from one vertical to another.

• Similarly, while Korea has been its biggest market thus far internationally, demand is also inflecting in new markets like Taiwan.

• Bloom’s deal sizes were already increasing before the AEP deal. With the company only recently announcing its largest deal ever, two weeks ago for 80MW, it quickly trumped that with its first 100MW deal with AEP. Of note, we expect the remaining 900MW of capacity to be taken quickly. AEP is focused on the East Coast, where there is a 6-7 year wait for power needs.

• Bloom has been working on MULTIPLE large data center deals. AEP is just the first. We expect others to drop too.

• Importantly, as its current capacity gets filled, BE's business model will finally inflect too.

To their credit, Morgan Stanley offered investors a look at the bull case on the EBITDA line going out to 2031. It is not crazy for BE to hit these numbers. In fact, we even see further upside, simply because Bloom's solutions appear to be THE BEST for the power needs of data centers until nuclear really kicks in later this decade. 

Note the highlights. MS bull case is almost 70% higher than current consensus. As new deals stack in the coming months, we expect the enthusiasm for BE to only increase. 

We can now see an Uber-Bull scenario where $60-$75 comes into play in 2027.  For now, we are looking for a follow-through move the low-to-mid $20s where we plan to take some risk off our very large position. We will then ride our long-term weighting for the expected move to $40 by the 2H’25of 2025.

BE 4-YEAR WEEKLY

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Disclosure:   We are long BE stock and calls. We may change our positioning at a moment’s notice, without notifying you of any such moves.

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In no shape or manner should the views expressed in this piece be considered investment advice. We reserve the right to change our positioning in our BE stock and options positions at a moment’s notice without updating you on any such change in opinion and positioning. That may be tomorrow, even before our price target is hit. Facts change, our opinions can change quickly too.

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