Bloom Energy $BE ( ▲ 12.82% ) surged early Thursday after American Electric Power $AEP said one of its subsidiaries will exercise an option to purchase additional Bloom fuel cell systems, expanding a prior agreement into a deal worth $2.65 billion.
The announcement sent Bloom shares ripping higher as investors digested the scale and duration of the contract.
A long-term power commitment in Wyoming
AEP also disclosed that it has signed a 20-year agreement with an unnamed customer to supply the full output from a fuel cell power generation facility to be built near Cheyenne, Wyoming.
That long-term offtake agreement adds visibility and stability to the project, which is a key reason the market reacted so strongly to the news.
Why analysts see this as a big positive
Evercore ISI analysts said the deal is a meaningful validation of Bloom’s demand outlook and clears up uncertainty around the size of AEP’s commitment.
They noted that the contract implies volumes well above Bloom’s prior minimum commitments, which had been opaque to investors. The deal also helps counter the narrative that Bloom is overly reliant on Oracle $ORCL ( ▼ 1.65% ) , following their collaboration announced in July 2025.
A momentum stock with a premium valuation
With Thursday’s surge, Bloom Energy is now up more than 400% over the past 12 months, fueled by enthusiasm around rising power demand from AI data centers.
While the company has posted adjusted profitability over the last four quarters, Bloom remains richly valued, trading at more than 100 times forward earnings.