Barclays Upgrades Bloom Energy Even as It Cuts Price Target

It's not every day an analyst upgrades a stock and cuts the price target in the same note. That's what Barclays did with Bloom Energy (BE) on Tuesday, and the shares jumped nearly 10% anyway.

Barclays moved Bloom to Overweight from Equal Weight, saying demand is accelerating faster than it modeled. It trimmed its 12-month target to $289 from $316, which still implies about 47% upside from Monday's $196.25 close, as Investing.com reported via Yahoo Finance. CNBC also flagged the move among Tuesday's biggest gainers.

Why raise the rating but lower the target? Analyst Christine Cho is more bullish on the business and more cautious on what each dollar of growth is worth per share. Higher revenue, thinner margins, and a cash-flow squeeze all show up in the math.

Start with the demand signals. Cho pointed to three: faster capacity expansion, rising customer deposits and new supply commitments. Together they suggest Bloom's backlog is growing faster than anyone assumed.

Customer deposits are the headline. They climbed to $661 million in the third quarter from $78 million at the end of 2025, including roughly $300 million in the quarter alone. If customers typically put down about 10% of contract value, that points to at least $3 billion in underlying contracts. Cho cautioned that some of it may be milestone payments on deals already booked.

Customer deposits rose to $661 million in the third quarter from $78 million at the end of 2025, including a roughly $300 million sequential increase in the quarter.

Bloom's spending tells the same story. It put about $150 million into capex in the third quarter, which Cho reads as roughly one gigawatt of added manufacturing capacity, and it signed a lease that about doubles its factory footprint. It also disclosed about $5.8 billion in long-term supply commitments through 2029, up from just $16.4 million a quarter earlier.

Barclays now models 2026 revenue of $4.65 billion and 2027 revenue of $8.16 billion. Bloom's own guidance, raised for the third time this year after a quarter where revenue more than doubled to $1.24 billion, calls for $4.4 billion to $4.6 billion in 2026, according to TIKR's post-earnings breakdown.

There was also a headline on Monday. Bloom signed a non-binding memorandum of understanding with California Resources and its Carbon TerraVault unit to evaluate 1 gigawatt or more of fuel cell power paired with carbon capture in California.

Keep that one in perspective. The word that matters is non-binding. No financial commitments have been made, and Oppenheimer, which keeps a Perform rating on the stock, pointed that out explicitly, according to a recap from boerse-global. It's a framework, not an order.

Here's the stock-specific takeaway. Bloom makes solid oxide fuel cells that generate on-site power, and AI data centers that can't wait years for grid hookups are a natural customer. The numbers above say buyers are lining up and Bloom is building ahead of them.

But look at where the stock has been. It fell 11% on Oct. 23 right after a beat-and-raise quarter and sat about 44% below its June 22 record, with free cash flow of negative $181 million as capex tripled. Bloom trades around 40 times forward earnings, per TIKR. Even after Tuesday's pop, the market is still debating how much growth is already priced in.

The risk list is clear. Funding inventory, vendor advances and capacity before revenue gets recognized could hold 2027 free cash flow below Street expectations, Barclays warned. An accounting effect tied to the Oracle warrant will also weigh on reported revenue and gross margin, with about $307 million of customer consideration booked as contra-revenue. Customer concentration remains a worry as well.

JPMorgan, for context, cut its target to $292 from $314 after earnings but kept its Overweight rating, saying Bloom's execution "continues to impress." So two big banks now sit in the high-$200s for targets, both bullish on the business.

What to watch: whether customer deposits keep rising next quarter, whether the cash drain eases as deliveries convert backlog into revenue, and whether the California Resources memo turns into a signed contract. A binding deal would be a real step up.

Bottom line: Barclays is betting on Bloom's order book, not its near-term cash flow. Size a position with that gap in mind.