Barclays Upgrades Bloom Energy to Overweight, Cuts Price Target to $289
Key Facts
On November 3, Barclays upgraded Bloom Energy to Overweight from Equal Weight, while cutting its price target to $289 from $316, signaling an improved view of demand despite a lower valuation estimate. StreetInsider, citing Investing.com, reported that analyst Christine Cho tied the decision to accelerating capacity expansion, higher customer deposits and new supply commitments. She said the indicators suggest the company's backlog is growing faster than previously estimated. The review followed the company's report of record quarterly results and an increase to its full-year outlook, while Reuters reported that the stock rose 6.3% in premarket trading on November 3. The shares had lost about 31% over the previous month, according to the same report.
Deposits stood out as one of the indicators the analyst relied on to assess demand. Customer deposits totaled $661 million in the third quarter, compared with $78 million at the end of 2025, including an increase of nearly $300 million during the quarter alone. Barclays estimated that this level could point to underlying contracts of at least $3 billion, assuming customary upfront payments of about 10% of contract value. StreetInsider, citing Investing.com, quoted Cho as saying: "If customers are typically paying about 10% upfront on contract value, this suggests underlying contracts of at least $3 billion." This remains an analytical inference from the deposits, as some amounts may include milestone payments on existing contracts.
Bloom's disclosure of about $5.8 billion in long-term supply commitments through 2029, up from $16.4 million in the second quarter, reinforced the demand outlook. Cho said accelerating capacity expansion, deposits and new supply commitments support her estimate that the backlog is expanding faster than expected. The analyst wrote that "accelerating capacity expansion, higher customer deposits and new supply commitments indicate that the fuel-cell manufacturer's backlog is growing faster than previously assumed." These indicators put demand for the company's products at the center of the rationale for the upgrade, while the new price target remains below the previous one. This reflects Barclays' combination of a more positive view of the demand trajectory and a more cautious price estimate.
On the operating front, Bloom reported third-quarter 2026 revenue of $1,235.8 million, up 138.1% year over year. Gross margin was 33.8%, compared with 29.2% in the third quarter of 2025. The company raised its fiscal 2026 revenue guidance to a range of $4.4–$4.6 billion, with a non-GAAP gross margin of about 34%. It also set non-GAAP diluted earnings per share guidance of $3.10 to $3.40. The figures provide financial context for Barclays' review, as the company combines revenue growth and higher annual guidance with supply commitments extending through 2029.
Bloom's chief executive said demand that began with hyperscale data center operators is spreading to other sectors because every company needs reliable power to grow. He said: "What began with hyperscale data center operators is quickly moving into other market sectors, because every company needs reliable power to grow." The comment places the expansion of the demand base within the company's account of its applications, extending beyond a single customer segment. At the same time, accumulated demand and commitments precede deliveries and the recognition of related revenue. The company's fiscal 2026 guidance and delivery timelines through 2029 remain among the key figures markets are watching to assess its growth trajectory.