Data center operators increasingly choose Bloom Energy fuel cells over grid connection for power reliability and cost arbitrage.
Artificial intelligence is driving unprecedented electricity demand for data centers. According to Gartner, data center electricity consumption is projected to reach 565 terawatt-hours (TWh) in 2026, a staggering 26% year-over-year increase. Power is becoming a major hurdle for technology companies, and "time-to-power" has emerged as the critical new bottleneck, as data center developers face multi-year waits for traditional utility grid upgrades and interconnection build-outs.
Goldman Sachs reports that U.S. data center demand will outpace available capacity through 2028. According to a July 2026 analysis by energy intelligence firm Currence, 30% to 50% of the large-scale data center capacity originally expected to come online in 2026 faces major delays. Upgrading the aging grid and adding more capacity involves costly transmission improvements and multi-year interconnection queues, making traditional infrastructure solutions impractical for companies racing to deploy AI compute.
To bypass these extensive delays, operators are increasingly turning to plug-and-play power solutions like Bloom Energy's solid-oxide fuel cells. These on-site power generators can be rapidly deployed in less than two months. The fuel cells run on natural gas, biogas, or hydrogen, provide reliable baseload energy, and operate independent of the electric grid.
Bloom Energy has emerged as a winner amid the data center energy crunch. The company demonstrated its time-to-power advantage in 2025 when it deployed fuel cells for Oracle Cloud Infrastructure facilities in 55 days, well ahead of its 90-day target. This proof of concept convinced Oracle to scale up its deal to a 2.8 gigawatt master agreement. Bloom Energy has also expanded its infrastructure agreement with Brookfield Asset Management to $25 billion, up from a $5 billion agreement one year prior. The company has secured several megadeals worth billions of dollars with companies such as Oracle, Brookfield Asset Management, and American Electric Power.
In the second quarter, Bloom Energy's revenue surged 166% to $1.065 billion, marking the company's first billion-dollar quarter. Blended gross margin was 34%, up more than 6% year over year, while diluted earnings per share came in at $0.62. The company raised its full-year revenue guidance to $3.9 billion to $4.2 billion, driven by booming demand from hyperscalers, neoclouds, and colocation operators. The stock has surged 583% since the start of 2025, though it has experienced significant volatility as investors weigh the sustainability of the hyperscaler build-out, and is currently down 54% from its recent high of $351.
If macroeconomic stress or low returns on AI software investments cause hyperscalers to slow or pause infrastructure spending, Bloom's growth trajectory could slow significantly. However, the ongoing AI build-out has a long runway for growth ahead.