Bloom Energy’s stock experienced a significant sell-off following a stark rating cut from investment bank Jefferies. The downgrade triggered a wave of selling that erased a double-digit percentage from the share price.
Market Reaction and Trading Frenzy
The immediate market response was severe. During the trading session, Bloom Energy’s share price plummeted by 10.8 percent. This sharp decline was accompanied by a massive surge in trading activity, underscoring the negative sentiment. More than 33 million shares changed hands, a figure that represents a staggering 308 percent increase over the stock’s average daily volume of approximately 8.1 million shares.
Valuation Concerns Spark Downgrade
The catalyst for the downturn was Jefferies’ decision to lower its rating on the stock from “Hold” to “Underperform.” The bank’s analysts expressed concern that the equity’s valuation has become disconnected from the company’s fundamental business performance. They attributed this disconnect to excessive market enthusiasm regarding Bloom Energy’s perceived role in the artificial intelligence-driven data center boom.
Jefferies also cited limited visibility for growth beyond 2026 and pointed to early signs of what it termed “over-exuberance” among investors. This skeptical view is shared by Bank of America, which also maintains an “Underperform” rating and questions whether the current high valuation is justified by the underlying fundamentals.
Should investors sell immediately? Or is it worth buying Bloom Energy?
A Divided Analyst Community
Despite the sharp correction, Wall Street remains split on Bloom Energy’s prospects. While Jefferies and Bank of America urge caution, other major firms have recently issued more bullish price targets.
Institutions like Morgan Stanley and UBS view the company as a potential major beneficiary of the immense energy demands of modern data centers. Consequently, the overall consensus rating among analysts covering the stock continues to stand at “Moderate Buy,” even after the recent negative assessments.
Key Data Points:
* Analyst Action: Jefferies downgrades to “Underperform”
* Price Impact: Shares fell 10.8%
* Trading Volume: Surged 308% above average
* Primary Concern: Valuation appears detached from fundamentals
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