Bloom Energy sinks 13% as record sales come with a cash burn

What happened

Bloom beat every headline forecast and raised its outlook, yet the stock fell for a second day.

• Bloom reported after Thursday’s close. Third-quarter revenue rose 138% to $1.24 billion, against about $1.06 billion expected, and adjusted earnings were $0.94 a share against $0.69.
• It raised its 2026 revenue forecast for the third time this year, to $4.4–4.6 billion. It now expects adjusted earnings of $3.10–3.40 a share, against the $2.71 analysts had expected.
• The stock had already fallen 8.7% on Thursday, before the report, as AI power stocks sold off. On Friday it fell another 13%, to about $189 by early afternoon, erasing about $8 billion of market value.
• The broad market was calm: the S&P 500 was down 0.5% and the Nasdaq 0.1%. GE Vernova and Vertiv, two other data-center power suppliers, were flat, so the drop is about Bloom’s own report.

Why the market reacted this way

The sales were strong, but the cash didn’t follow, and after a 21-fold run to a June peak, investors sold the news.

Why a record quarter used cash

Bloom’s growth is tying up cash before customers pay for it. Operating cash flow was a $27 million outflow, and capital spending of $153 million, up from $12 million a year earlier, took free cash flow to minus $181 million. Its capital spending so far this year, $231 million, is already four times its total for 2025. Three items on the balance sheet explain most of it, compared with the end of 2025:

• Unbilled work (contract assets) jumped from $179 million to $793 million. That is revenue Bloom has recorded for systems delivered but can’t bill until set milestones are reached.
• Inventory rose from $643 million to $928 million as Bloom builds ahead of data-center deliveries.
• Money customers owe (receivables) rose from $372 million to $635 million.

CFO Simon Edwards said the contract assets and receivables should turn into cash as billing milestones are reached, and that the business is self-funding. Free cash flow is still positive for the year so far, at $42 million. Spending will stay high, though: CEO KR Sridhar said Bloom is expanding its Fremont site to prepare for demand beyond its planned 5 gigawatts of factory capacity, adding capacity gradually as orders come in. Bloom gave no cash-flow forecast. It ended September with $2.5 billion of cash against $2.5 billion of 0% convertible notes due 2030. Its share count has risen about 5.5% this year, and those notes, which convert at about $195 a share, could add about 13 million shares (about 4%) if they convert.

A huge run, already fading

The stock was priced for perfection, and it had been sliding before the report. Bloom rose from $16.32 in May 2025 to a record $345.85 on June 22, 2026, about 21 times higher. By Thursday it was still up 151% this year, but 37% below that peak, after falling with other AI power stocks in October. Bloom joined the S&P 500 during the quarter.

At about $189, Bloom trades at roughly 58 times the midpoint of its 2026 earnings forecast and about 12.4 times its expected 2026 sales (our math). That’s about 115 times its earnings under standard accounting over the past four quarters (our math). At that price, a beat with negative cash flow was enough for a “sell the news” reaction, Investing.com reported.

What analysts said

Analysts stayed mostly positive but disagreed on the near term.

• Morgan Stanley raised its target to $335 from $310 and kept an Overweight rating. It now expects shipments of 2.1 gigawatts in 2027 and 3.7 gigawatts in 2028, partly offset by higher interest rates in its valuation.
• BTIG cut its target to $250 from $295, citing pressure on margins, and kept a Buy rating.
• Mizuho reiterated an Outperform rating with a $351 target, and BMO kept a Hold rating.

Does this change Bloom Energy’s future?

The report strengthens the demand story; what changed is how much cash the growth needs before it pays off.

What did NOT change

• Demand from data centers is still growing. Bloom delivered power to Oracle’s Utah site within two months of the project’s announcement and has equipment ready for Nebius’s New Jersey data center. AEP plans 700 megawatts of Bloom systems to supply Google.
• Bloom is profitable: third-quarter profit under standard accounting was $250 million.

What DID change

• Growth now ties up cash in inventory and unbilled work, and Bloom is spending heavily on new factories. Investors will want to see that cash come back in the fourth quarter.
• Two of the customers Bloom named are in the same credit squeeze hitting the AI build-out: Oracle’s borrowing costs have jumped this month, and lenders have grown warier of neoclouds such as Nebius. That links Bloom’s demand to the same credit questions hitting the AI build-out (our Big Picture on AI infrastructure stocks).

Our read

This was a strong quarter that disappointed on cash, at a price that left no room for that. The next test is whether the unbilled work turns into cash as promised.