Bloom Energy shares sink 11% as record AI power quarter burns cash

Bloom Energy shares fell about 11% to roughly $193 on Friday, Oct. 23, the day after the fuel cell maker reported the best quarter in its history, according to TIKR data published on Yahoo Finance. The drop erased about $7.4 billion of market value as investors looked past the headline growth to the cash flow statement.

What happened

Third-quarter revenue rose 138.1% from a year earlier to $1,235.8 million, and product revenue climbed 179.4% to $1,073.6 million, the company said. Gross margin widened to 33.8%. Non-GAAP earnings of $0.94 a share beat the LSEG consensus of $0.68, and revenue topped the $1.06 billion estimate, CNBC reported.

Bloom raised its 2026 revenue forecast for the third time, to $4.4 billion to $4.6 billion, and noted that it has been added to the S&P 500, according to the Bloom Energy results release.

The stock first slipped 5% after hours on Thursday, CNBC said, then extended the slide in regular trading.

Why it matters

Cash is the issue. Operating cash flow was negative $27.1 million in the quarter, and capital spending of $153.5 million was about three times the second-quarter level, leaving free cash flow at negative $180.6 million, according to TIKR. Over nine months, free cash flow is still positive at $41.6 million.

Finance chief Simon Edwards said on the call that the quarter is "not the beginning of a trend." TIKR noted that unbilled contract assets ended September at $859 million, ahead of $754 million in customer deposits and deferred revenue, and a further $346 million went into inventory and receivables during the quarter.

Concentration is the second worry. According to the 10-Q filing cited by TIKR, one customer accounted for about 43% of third-quarter revenue and another, a related party, for about 26%. That leaves Bloom Energy shares tied closely to a few data center buildouts, and the filing does not say how much of the contract assets those two buyers account for.

Valuation leaves little room for error. Analysts expect normalized earnings of $3.27 a share in 2026, just above the midpoint of the company's $3.10 to $3.40 guidance, rising to $5.15 in 2027, according to TIKR. At about $193, the stock trades at roughly 37 times 2027 estimates.

What's next

The selloff fits a wider pattern. CoinDesk described it as a case of good news being bad news while the AI trade struggles. Power and data center names have been punished for delays and heavy spending, as in our coverage of the NextDC guidance cut and rising CoreWeave credit default swaps.

Investors will watch fourth-quarter cash conversion and whether Edwards repeats the operating cash flow target he gave in July, which TIKR said he left out this time. After $272.9 million in the first nine months, the fourth quarter needs about $102 million to meet it; in the previous two years, the fourth quarter generated $484 million and $418 million. A return to positive free cash flow would test whether the drop in Bloom Energy shares was an overreaction.