Brookfield’s $5-billion deal spurs rally in Bloom Energy shares
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- Bloom Energy shares surged 27% after Brookfield Corp. agreed to invest $5 billion to deploy fuel cells at new AI data centers worldwide.
- The deal marks Brookfield’s first investment in its AI infrastructure strategy as power requirements from artificial intelligence are set to quadruple this decade.
- San Jose-based Bloom will become the preferred on-site power provider for Brookfield’s global AI data centers, including a European site expected this year.
Shares of Bloom Energy Corp. soared 27%, the biggest gain in almost a year, after Brookfield Corp. agreed to invest up to $5 billion to deploy the company’s fuel cells at new data centers that operate artificial intelligence.
The investment firm and the energy-storage company are collaborating on AI data centers globally, including a site in Europe that will be announced before the end of the year, according to a statement Monday.
The companies said factories are needed to meet “the growing compute and power demands” of AI.
The deal creates multiple benefits for San Jose-based Bloom beyond the validation of its technology for AI, Oppenheimer analysts wrote in a note, including higher sales.
The concentration of Bloom units will provide service efficiencies, while Brookfield can help provide financing for customers looking to lease fuel cells.
“We expect all of these dynamics to support above-consensus sales growth and margin expansion,” the analysts said.
The agreement is Brookfield’s first investment through its dedicated AI infrastructure strategy. It confirms Bloom’s ability to be a key player in the power buildout to support AI, according to Evercore analysts, who added that it underscores a key point for the industry, which is “speed to power is paramount.”
Demand for electricity, driven by data centers, new manufacturing and overall electrification, has shaken up the energy industry and attracted massive amounts of new investment to the power sector. Power requirements from AI are set to quadruple within a decade, according to BloombergNEF.
As technology companies rush to bring data centers online and wait times for connecting to the power grid lengthen, alternative energy solutions such as Bloom’s fuel cells become more attractive. Bloom will become the preferred on-site power provider for Brookfield’s global AI data centers, according to Monday’s statement.
Bloom shares jumped 59% on Nov. 15, 2024, after American Electric Power Co. said it would use the company’s fuel cells to supply data centers. Bloom also has an agreement to provide on-site power to Oracle Corp.’s AI data centers.
On Tuesday, Bloom Energy shares closed at $114.06, up 4%.
Saul writes for Bloomberg.
