Divergent Paths in Hydrogen: Bloom Energy Rides the AI Wave While the Rest of the Sector Scrambles

The hydrogen sector is undergoing a massive, fundamental split. It’s no longer a rising tide lifting all boats; instead, a clear fault line has emerged. On one side are the companies successfully inserting themselves into the artificial intelligence infrastructure narrative, finding themselves practically showered with capital. On the other side are the traditional players focused on classic electrolysis, mobility, or smaller-scale projects, who are still forced to fight tooth and nail for every single contract.

This divergence was on full display after Thursday’s closing bell, as stellar financial results and massive infrastructure deals sent shockwaves through the market, separating the sector’s clear winners from those struggling to maintain traction.

Bloom Energy Blows Past Estimates on Earnings and AI Demand

Bloom Energy Corporation (NYSE:BE) saw its shares surge on Friday, continuing a breathtaking trajectory that would have seemed impossible just a year ago. The catalyst was a powerhouse fourth-quarter earnings report coupled with fiscal-year 2026 guidance that easily cleared Wall Street’s expectations.

Bloom posted adjusted earnings per share of 45 cents, comfortably beating the consensus estimate of 31 cents. Revenue for the quarter landed at $777.68 million, outperforming the forecasted $652.09 million. This represents a 35.9% year-over-year revenue jump, fueled heavily by a 33.2% increase in product and service revenue, which totaled $700.2 million.

Margins showed healthy progression as well. Gross margin hit 30.8% for the quarter, with non-GAAP gross margin at 31.9%. Notably, service gross margin swung to a positive 16.9%, a massive improvement from the losses recorded in the same period last year. Operating income came in at $87.5 million, while non-GAAP operating income reached $133.0 million. Bloom also proved to be a cash machine during the quarter, generating $418.1 million in cash flow from operating activities.

Management attributed the strong performance to disciplined execution, improving operating leverage, and aggressive product cost reductions—all happening against a backdrop of surging demand across their core markets.

The Brookfield Effect and the Market’s Verdict

Beyond the raw quarterly numbers, the real fuel behind Bloom’s astronomical valuation—which now commands a market cap well north of $80 billion—is its positioning as the go-to power provider for the AI data center boom.

The momentum kicked into high gear following an expanded partnership with Brookfield Asset Management. Financing for AI infrastructure projects was dialed up from $5 billion to a staggering $25 billion, backed by Brookfield’s massive AI Infrastructure Fund. Oppenheimer analyst Colin Rusch remains highly bullish on the stock, pointing to Bloom’s distinct advantages in “time-to-power,” its DC architecture, and the modular design of its systems. Rusch also views Bloom’s ongoing equity stakes in these Brookfield projects as a lucrative option for future cash flows.

From a technical and market perspective, Bloom’s momentum is incredibly strong, though it demands a bit of caution. The stock is trading 6.3% above its 20-day simple moving average (SMA) and a staggering 41.5% above its 100-day SMA. Over the past 12 months, shares have skyrocketed by over 450% (with European trading pairs showing even higher triple-digit gains from their lowest points), positioning the stock much closer to its 52-week highs than its lows.

However, the technical indicators flash a slightly mixed signal for short-term traders. While the RSI sits at a neutral 49.75, the MACD has slipped below its signal line, hinting at some underlying bearish pressure. Market metrics label Bloom’s growth and momentum as exceptionally strong, but its value score remains weak. The stock trades at a steep premium relative to its peers. Investors love the AI-driven growth potential, but the current valuation means you are paying a serious premium to get in.

Plug Power: A Grinding Turnaround Story Facing Headwinds

While Bloom flies high on AI euphoria, Plug Power is grounded in a more grueling reality, attempting to build credibility for its ongoing turnaround story. The stock has been highly volatile, sitting just slightly above its 200-day moving average—a stark reminder of how much near-term choppy trading has pulled the stock away from its longer-term baseline.

On the operational front, Plug is making some tangible progress. First-quarter revenue grew 22% to $163.5 million, propped up by steady demand in material handling and electrolyzer shipments. Management is stubbornly sticking to its target of reaching break-even on a gross margin basis by the end of 2026. It’s a necessary stepping stone to actual profitability, but one they haven’t reached just yet.

Wall Street remains deeply divided on whether Plug can actually pull this off. The consensus hovers around a “Hold” with a price target of $3.64, but recent notes from Susquehanna, Jefferies, and Wells Fargo paint a much bleaker picture, averaging a target of just $2.18—roughly 25% below current trading levels. Conversely, pockets of optimism remain: TD Cowen bumped its target to $3, B. Riley pushed theirs to $5, while BMO Capital anchors the pessimistic end of the spectrum at a dismal $1.20. This massive spread proves that the broader market isn’t fully buying the turnaround narrative quite yet.

Small-Cap Hydrogen: Dependent on the Next Headline

Further down the food chain, the reality is even tougher for smaller players like PowerCell Sweden, Hydrogenpro, and AFC Energy. These companies don’t have the luxury of riding the macro AI wave. Instead, they are entirely at the mercy of individual project updates, binary contract announcements, and dilutive financing rounds. For them, access to capital markets and literal day-to-day project execution dictates the stock price.

At PowerCell Sweden, things have quieted down significantly. The stock has faced a painful monthly drag, down over 30% in the last 30 days. Investors are anxiously eyeing the upcoming second-quarter interim report scheduled for July 16. The company’s previous commentary blamed a sluggish macro environment for slow project implementation. With a modest market cap of around 970 million Swedish kronor and a negative EBIT margin of 5.96%, PowerCell reminds us that for a vast portion of the hydrogen sector, sustainable profitability is still a distant horizon.