Bloom Energy Is a Surprise Big Winner from the Elections

Bloom Energy stock was surging for a second consecutive day Wednesday. (Courtesy Bloom Energy)

Key Points

Bloom Energy stock rose 7% in premarket trading Wednesday following a Democratic sweep of the midterm elections.
Bloom Energy bypasses the power grid by using fuel cell-based onsite power, which CEO KR Sridhar said can benefit from data center backlash.
Clean energy stocks surged overall as Democrats took control of the Senate and the House.

The Democratic sweep of the midterm elections has ramped up the political pressure on the artificial-intelligence data-center buildout. But that’s helping AI power supplier Bloom Energy –the stock was surging 7% ahead of the open Wednesday.

A key pillar of the opposition to the rapid expansion of data centers is the constraints and pressure it puts on the power grid. However, Bloom’s fuel cell-based onsite power bypasses the grid. In fact, CEO KR Sridhar has even said the backlash can benefit the company.

“Communities welcome Bloom, and that is proving to be a real competitive advantage,” he said on an earnings call in July.

The market seems to agree Wednesday, particularly after Democrat Gina Hinojosa—a vocal critic of the buildout—won the Texas governor’s race.

Bloom climbed 9% on Tuesday after catching an upgrade from Barclays.

Clean energy stocks, in general, were surging after the Democrats took control of the Senate and the House. The sector has been under huge pressure from President Donald Trump’s policies since he returned to the White House.

First Solar , Enphase Energy , and Nextpower all jumped more than 7% in premarket trading.

“The driving force behind potential strength in solar names under a ‘blue wave’ is our view that the investment tax credit for clean energy investments may be discussed on the legislative floor,” Baird analyst Ben Kallo said in a note late Tuesday.

He noted that Trump would still have veto power but that the tax credit has been extended in the past under Republican control of the White House.

Write to Callum Keown at callum.keown@dowjones.com

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