Fuel cell manufacturer Bloom Energy (BE -5.88%) soared 20.4% through 11:50 a.m. ET Friday, which is kind of strange... because last night Bloom Energy reported its Q3 earnings -- and it missed pretty badly.
Heading into the report, analysts forecast Bloom Energy would earn $0.08 per share on sales of $382.2 million. In fact, Bloom's Q3 sales were only $330.4 million, and instead of earning a profit, Bloom lost money -- $0.01 per share pro forma, and $0.06 per share, according to generally accepted accounting principles (GAAP).
Bloom Energy Q3 earnings
Investors didn't care. Concurrent with the earnings news, you see, CEO KR Sridhar was able to announce a new partnership with South Korea's SK Eternix to build "the world's largest fuel cell power system and make it operational in 2025." Sridhar called the deal, at 80 megawatts, "a proof point for how Bloom Energy can power large AI data centers going forward."
And there you have it, folks, the likely reason why Bloom stock is rocking today: More than just a hydrogen stock, Bloom has now become an artificial intelligence (AI) stock as well.
Is Bloom Energy stock a buy?
And this wasn't Bloom's only good news. While sales shrank 18.5% year over year, Bloom succeeded in shrinking cost of goods sold by 38%. As a result, Bloom's gross profit margin, which had been negative just one year ago, improved to positive 23.8% in Q3 2024.
Operating margin, while still negative, is much less so than it used to be, at only negative 2.9%. On the bottom line, Bloom still lost $0.06 per share. However, this was a much better result than the $0.80 per share Bloom lost in Q3 2023. Analysts still expect Bloom to lose money this year, but hope profits will turn positive in 2025.
I hope they're right. With Bloom still unprofitable and burning cash today, I can't quite bring myself to recommend buying this stock just yet. That said, the improvement is undeniable. Bloom investors finally have a solid reason for optimism.
