Bloom Energy Is Joining the S&P 500: Is the Stock Still a Buy After Its Massive Run?

Bloom Energy (NYSE: BE) stock has gone on an explosive run and has officially earned a spot in the S&P 500 . On Sept. 4, S&P Dow Jones announced that Bloom Energy, along with Illumina and Everpure , would join the index, while Molson Coors , Builders FirstSource , and The Trade Desk were removed.

Bloom Energy jumped after hours on the news, and the stock is set to join the S&P 500 on Sept. 21. Bloom has been a primary beneficiary of the huge power demand coming from artificial intelligence (AI) data centers, which hyperscalers continue to invest in at a staggering rate.

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After its run-up and its inclusion in the S&P 500, is Bloom Energy still a buy? Let's dive into its long-term outlook to find out.

Bloom Energy addresses a major bottleneck hyperscalers are facing

The AI data center build-out has revealed power as a major bottleneck for hyperscalers. For one, securing a transmission connection to a regional power grid can take four to seven years. Regional transmission operators face enormous backlogs and severe supply shortages of high-voltage power transformers and other vital infrastructure.

On top of this, local communities and public utilities are facing pushback from residents on data center construction. Residential customers don't want to bear the costs of the capital expenditures required to expand the power grid just to connect new data centers. As a result, hyperscalers are seeking independent, off-the-grid power alternatives like Bloom Energy's solid-oxide fuel cells.

Bloom's fuel cells run on natural gas but can also run on biogas or hydrogen using an electrochemical reaction rather than combustion. Its biggest competitive advantage is that its fuel cells are factory-fabricated and can be installed on-site in three to four months, helping hyperscalers get their data centers up and running significantly faster since they don't have to wait to connect to the electric grid.

The company's fuel cells have been validated by hyperscalers and neocloud customers. Notably, in 2024, Bloom Energy delivered its fuel cell power system for an Oracle cloud infrastructure AI data center in just 55 days.

In its second-quarter earnings call, Chief Executive Officer K.R. Sridhar noted that "over a dozen U.S. neoclouds, AI labs and colocation data center operators have validated and approved our power solutions."