Bloom Energy Corporation shares surged over 8% to hit an all-time high Tuesday after Morgan Stanley analyst David Arcaro dramatically increased his price target from $44 to $85, marking the highest Wall Street target for the fuel cell manufacturer. The upgrade directly follows Oracle’s stunning earnings report that revealed explosive growth in AI data center demand, positioning Bloom Energy as a prime beneficiary of the power infrastructure boom.
Morgan Stanley Cites Oracle Partnership as Key Growth Driver
The Bloom Energy Morgan Stanley price target increase represents a fundamental shift in analyst sentiment, driven by Oracle’s remarkable first-quarter performance. Oracle reported remaining performance obligations of $455 billion, a staggering 359% year-over-year increase that CEO Safra Catz called “an astonishing quarter”. This massive backlog stems from four multibillion-dollar contracts with three customers, including major AI players like OpenAI, Meta, NVIDIA, and AMD.
Arcaro emphasized Bloom’s strategic positioning through its July agreement to power Oracle’s AI data centers with fuel cell technology. The partnership enables Bloom to deliver complete onsite power solutions for entire data centers within just 90 days, addressing critical bottlenecks in AI infrastructure deployment.
“We think Bloom has now become much more clearly, favorably positioned for success in powering AI data centers,” Arcaro wrote in his research note. The analyst highlighted Bloom’s unique manufacturing flexibility, noting the company can double its production capacity to 2 gigawatts in under six months while maintaining rapid product delivery timelines.
Power Supply Crisis Creates Massive Market Opportunity
The Bloom Energy Morgan Stanley price target upgrade reflects broader concerns about power infrastructure constraints across the data center industry. Traditional utilities are reporting connection wait times of 5-7 years for new data centers, while alternative power equipment suppliers face 2-3 year delays for certain units. These extended timelines create significant competitive advantages for companies like Bloom that can rapidly deploy power solutions.
Morgan Stanley projects the potential power shortfall could exceed 40 gigawatts in coming years, compared to Bloom’s current 1 gigawatt annual capacity. This supply-demand imbalance presents substantial growth opportunities, with every additional gigawatt of capacity translating to approximately $5 per share in value for Bloom’s stock.
Recent industry data supports these projections. In Chicago alone, utilities have received power requests totaling 40 gigawatts—roughly 40 times the city’s existing data center capacity. Deloitte estimates that power demand from AI data centers could grow more than thirtyfold by 2035, reaching 123 gigawatts nationwide.
Bull Case Scenario Projects 175% Upside Potential
Beyond the base case Bloom Energy Morgan Stanley price target of $85, Arcaro established a bull case scenario of $185 per share, representing potential upside of 175% from current trading levels. This optimistic projection assumes Bloom becomes “a much larger player in the power landscape” by capitalizing on accelerating AI infrastructure demand.
The analyst’s confidence stems from Oracle’s projected revenue trajectory. CEO Safra Catz forecasts Oracle Cloud Infrastructure revenue will grow 77% to $18 billion in fiscal 2025, then surge to $32 billion, $73 billion, $114 billion, and ultimately $144 billion by 2030. Most of this revenue growth is already contracted through Oracle’s $455 billion remaining performance obligations backlog.
Oracle Chairman Larry Ellison reinforced the partnership’s significance, stating that multicloud database revenue from Amazon, Google, and Microsoft grew 1,529% in the first quarter alone. The company plans to deliver 37 additional data centers to hyperscaler partners, bringing the total to 71 facilities.
Stock Performance and Market Validation
Bloom Energy shares have delivered exceptional returns, surging over 220% year-to-date and more than 600% over the past 12 months. The stock closed Tuesday at $72.41, establishing a new 52-week high following Morgan Stanley’s upgrade. Trading volumes spiked significantly as institutional investors recognized the company’s strengthening fundamentals.
The Bloom Energy Morgan Stanley price target represents the culmination of multiple analyst upgrades in recent months. Wells Fargo raised its target from $38 to $65, while BMO Capital increased its projection from $35 to $75. RBC Capital doubled its price target to $75, reflecting growing confidence across Wall Street regarding Bloom’s AI infrastructure opportunity.
Institutional ownership stands at approximately 79%, with recent supply orders totaling $43.87 million from MTAR Technologies for fuel cell production equipment. These developments validate accelerating demand for Bloom’s solid oxide fuel cell systems in the rapidly expanding AI data center market.
Competitive Positioning in Clean Energy Transition
Bloom Energy’s fuel cell technology offers distinct advantages over traditional grid-connected power solutions. The company’s solid oxide fuel cells deliver clean power with virtually no air pollution and no water consumption, supporting Oracle’s sustainability objectives while providing ultra-reliable onsite generation.
This environmental profile positions Bloom favorably as hyperscalers pursue net-zero emissions goals. Oracle specifically highlighted Bloom’s contribution to sustainable energy sourcing for Oracle Cloud operations. The partnership demonstrates how clean energy solutions can accelerate AI infrastructure deployment while advancing corporate climate commitments.
The Bloom Energy Morgan Stanley price target upgrade reflects Wall Street’s growing recognition that power infrastructure represents a critical bottleneck for AI advancement. As traditional grid connections face multi-year delays, onsite power solutions become increasingly valuable for hyperscalers seeking rapid deployment capabilities.
Market Outlook and Investment Implications
Morgan Stanley’s analysis suggests Bloom Energy is entering a transformative growth phase driven by structural changes in data center power requirements. The 359% increase in Oracle’s remaining performance obligations provides unprecedented revenue visibility, while Bloom’s manufacturing scalability positions the company to capture significant market share.
The analyst upgrade comes as power supply constraints intensify globally. Grid stress has emerged as the leading challenge for data center infrastructure development, with 79% of industry executives expecting AI to dramatically increase power demand through 2035. This environment strongly favors companies like Bloom that can bypass traditional utility interconnection processes.
With Oracle expecting remaining performance obligations to exceed half a trillion dollars in coming months, and additional multibillion-dollar customer signings anticipated, the Bloom Energy Morgan Stanley price target of $85 may prove conservative if the partnership delivers projected growth rates.
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