On January 9, BMO Capital analyst Christopher Dendrinos maintained a Market Perform rating for Bloom Energy Corporation (NYSE: BE) with a $136.00 price target. The rating followed news of the company's first multi-hundred-megawatt utility order, signaling increased adoption of its fuel cell technology for grid-scale AI demand.
American Electric Power had previously agreed in 2024 to acquire 100 megawatts of solid oxide fuel cells from Bloom Energy, with an option to buy an additional 900 megawatts. A regulatory filing now shows AEP's utility unit has exercised that option.
The firm also noted AEP signed a separate 20-year power purchase agreement with an unnamed high investment grade counterparty. This PPA covers the output of fuel cell-generated power at an average selling price of $2,950 per kilowatt, aligning with BMO's model. The power will be supplied to a data center development in Wyoming associated with Bloom Energy.
In an 8K filing, AEP disclosed it will use most of the 900-megawatt balance from its 1-gigawatt supply agreement with Bloom Energy for a Wyoming-based data center project. The deal is valued at $2.65 billion as part of the separately executed 20-year PPA. This implies a product average selling price around $2,950 per kilowatt, largely consistent with BMO's modeled assumption of approximately $3,000 per kilowatt for 2026-2027.
However, the analyst stated the currently disclosed total revenue opportunity is about 65-70% below what BMO typically assumes for Bloom Energy fuel cell development if a separate service contract is not added later. Bloom Energy develops solid-oxide fuel cell systems for on-site power generation, which helps meet growing energy demands from AI data centers.