flowering energy (NYSE: BE) Investors are having a fantastic Friday, as shares of the renewable energy company are up 47.8% as of 10:30 a.m. ET.
Last night, Bloom Energy announced a deal to supply up to 1 gigawatt of fuel cells to the power company. American electric power (NASDAQ: AEP).
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Last night’s announcement comes on the heels of a miserable Bloom earnings report last week, a report that was redeemed by Bloom’s announcement of a deal to establish an 80-megawatt fuel cell system for South Korea’s SK Eternix. . However, there are 1,000 megawatts in a gigawatt.
So today’s news is 12.5 times greater than that, which explains the magnitude of the reaction that investors are having.
As Bloom explained, AEP intends to purchase Bloom’s fuel cell systems to deploy at the location of some of its customers’ AI data centers. (Yes, you read that right. Bloom Energy is now an artificial intelligence company.) The launch will begin with an initial order of 100 MW of fuel cells (so already more than last week’s announcement), with more fuel cells to be ordered in 2025, and is “deploying rapidly.”
In total, the AEP agreement promises to deploy approximately 77% of the fuel cell volume that Bloom has already deployed (1.3 GW) during its 23 years of existence. While Bloom did not say how big the deal with AEP will be in terms of revenue, if you compare historical data on Bloom’s revenue from 2014, which is as old as S&P Global Market Intelligence’s historical data, this implies the deal with AEP. could eventually generate revenues well in excess of $7 billion for Bloom.
Furthermore, Bloom has already reached a point where these revenues are grossly profitable, generating gross profit margins of nearly 24% in the third quarter, and although profitable operating and net margins finally appear achievable.
This deal could be the one that puts Bloom on top and finally makes the company profitable.
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