Bloom Energy will formally join the S&P 500 at the start of trading on Sept. 21, and the stock has already reacted with a sharp rally. Shares tumbled more than 55% between late June and late July before rebounding on strong earnings, a disclosed stake from Nancy Pelosi and her husband, and now the index-inclusion news.
Bloom Energy will formally join the S&P 500 at the start of trading on Sept. 21, part of the index's quarterly rebalance. The stock rallied to a one-month high after Labor Day, following S&P Dow Jones Indices' announcement that added the fuel-cell maker to the benchmark. Any company entering the S&P 500 gets at least a short-term bump, because funds tracking the index must buy the stock to match index weightings.
That dynamic showed up fast. Bloom Energy rose 6.3% to 274.74 in midday trading Friday, building on a jump that had already pushed shares above an early buy point at 253.31 on Tuesday. The stock is now forming a handle area with a potential 283.83 buy point, an early entry even as the official buy point for its deep cup base sits at 351.28.
A volatile summer for Bloom shares
Bloom shares tumbled more than 55% from a June 25 peak to a low on July 29, as investors lost confidence in AI-linked stocks. The stock bottomed after Bloom reported blowout earnings growth and gave bullish full-year guidance, then bounced off support at the 200-day moving average on Aug. 24.
Around that time, former House Speaker Nancy Pelosi and her husband, Paul, disclosed a purchase of 15,000 shares and 200 call options in Bloom Energy, a disclosure that helped extend the rebound.
Fuel cells for AI data centers
Bloom Energy makes fuel cells that convert hydrogen and oxygen into electricity, a clean-burning form of energy that appeals to AI hyperscalers running data centers. The San Jose-based company is one of the leaders in the No. 2-ranked alternative energy industry group, and it partners with Brookfield Asset Management, one of the largest data center developers and operators in the world.
Its recent results explain the market reaction: earnings went from 5% growth in Q4 last year to gains of 1,367% and 680% over the past two quarters, while sales rose 36%, 130% and 166% over the same stretch. Bloom Energy's 21-day average true range of 7.98% also runs considerably higher than normal, meaning the stock tends to make larger price moves that can trigger sell rules.
Source: Investor's Business Daily
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