Why Bloom Energy Stock Plunged Over 20% This Week

Shares of Bloom Energy (NYSE: BE) crashed this week, falling a little over 20% through 2 p.m. ET Friday, according to data provided by S&P Global Market Intelligence.

Bloom Energy's fourth-quarter earnings aren't due until Feb. 27. However, a recent development rattled investors in the manufacturer of hydrogen fuel-cell systems, even as analysts posted mixed views on the hydrogen stock this week.

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Why DeepSeek fears sent Bloom Energy stock crashing

While several analysts have raised their price targets on Bloom Energy stock over the past couple of weeks, some are turning cautious about the hydrogen stock.

For example, Piper Sandler analyst Kashy Harrison believes Bloom Energy is well positioned to outperform, driven by demand from high-potential markets like data centers, and raised the stock's price target to $33 per share from $30 this week. On the other hand, analysts from Bank of America lowered their price target on Bloom Energy stock to $18 per share from $20 this week, one day after the stock plunged by more than 25% in a single day amid a tech sector rout.

Technology stocks and nearly every stock related to artificial intelligence (AI) tanked earlier this week after Chinese AI start-up DeepSeek released a low-cost AI model that could potentially disrupt the AI landscape and data center industry in the U.S. Investors fear DeepSeek could hit investments in the U.S. data center industry hard.

Bloom Energy stock plunged, too, as the company's solid oxide fuel cell systems provide access to uninterrupted on-site power, which is critical for data centers. Bloom Energy expects data centers, driven by the AI and cloud computing boom, to be a key growth driver and already counts tech giants like Intel and Alphabet's Google among its customers.

Should you sell Bloom Energy stock now?

Although data centers are an important market for Bloom Energy, it's too early to predict how DeepSeek will affect the U.S. data center industry. Moreover, it isn't the only market for Bloom Energy. In fact, the company's energy platform can serve nearly every major industry, from manufacturing and utilities to biotech and retail.

For now, you'd want to watch out for Bloom Energy management's comments on DeepSeek's potential impact on the AI data center industry and the company's prospects when it hosts its Q4 earnings call later in February. As for numbers, Bloom Energy projected revenue worth $1.4 billion to $1.6 billion for 2024 versus a record $1.3 billion in 2023. If you ask me, I don't see any reason to panic-sell Bloom Energy stock.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Bank of America is an advertising partner of Motley Fool Money. Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Bank of America, and Intel. The Motley Fool recommends the following options: short February 2025 $27 calls on Intel. The Motley Fool has a disclosure policy.