Image Source: Unsplash

Bloomberg's influential research arm, BloombergNEF (BNEF), which focuses on energy transitions and commodities, released a pivotal update in December warning of explosive growth in data center electricity needs. Its report "AI and the Power Grid: Where the Rubber Meets the Road," BNEF raised its U.S. data center power demand projection by 36% to 106 GW by 2035, up from around 40 GW today. This aggressive estimate – one of the highest in the industry – reflects surging AI workloads and mega-scale facilities. Globally, AI-related demand highlights a critical bottleneck for the tech boom.

As hyperscalers like Microsoft (MSFT) and Google race to expand, delays in power delivery – often 1 to 2 years – highlight the challenge. One prime beneficiary the market is only just beginning to wake up to is Bloom Energy (BE), and here's why you might want to add it to your portfolio.

Overcoming Grid Challenges with Innovative Fuel Cells

Bloom Energy's solid oxide fuel cells provide a game-changing solution for AI data centers facing grid constraints. These modular systems generate on-site power using natural gas, biogas, or hydrogen, achieving up to 90% efficiency with heat recovery and emitting 50% less CO2 than coal plants. Deployable in just 90 days, they bypass lengthy utility upgrades, addressing the projected 35 GW U.S. shortfall by 2030. For AI's short, sudden workloads, Bloom integrates supercapacitors for rapid load handling, ensuring 99.9% uptime – vital for uninterrupted model training.

Data centers already represent about 30% of Bloom's customer base, with over 400 MW deployed globally and growing rapidly. Key deployments include Equinix (EQIX) (over 100 MW across multiple sites) and Oracle (ORCL) for its Cloud Infrastructure centers. The shift to on-site generation is accelerating, with industry forecasts showing it rising from 13% to 38% of primary power by 2030 as operators seek resilience as grid delays grow.

Strategic Partnerships and Explosive Growth

Bloom's momentum surged in 2025, with landmark deals fueling record performance. Q3 revenue hit $519 million, up 57% year-over-year – marking the fourth straight quarterly record – and drove positive operating cash flow.

Bloom is positioned as the preferred on-site provider for hyperscalers prioritizing speed and sustainability. The company is doubling production capacity to 2 GW annually by the end of 2026, backed by strong demand. A new $600 million senior secured revolving credit facility from Wells Fargo enhances liquidity for this expansion without dilution.

BE stock soared over 300% last year, closing the year strong and jumping another 14% to start 2026, reflecting investor recognition of Bloom's central role in the $7 trillion AI infrastructure wave.

Bottom Line

Energy supply remains the key bottleneck for AI data center proliferation, as Microsoft CEO Satya Nadella emphasized: "The biggest issue we are now having is not a compute glut, but it’s power," with GPUs idling due to insufficient infrastructure near reliable sources.

Bloom's always-on, clean fuel cells directly resolve this by enabling rapid, grid-independent scaling for mission-critical operations. The opportunity is massive, and BE's new credit agreement provides crucial financial flexibility, fueling significant expansion to capture this surging demand.

As AI reshapes energy markets, BE emerges as an underappreciated powerhouse primed for multi-year growth.

More By This Author: