Although clean energy company Bloom Energy (BE) stock has cratered over the past few months, aggressive risk-takers have a contrarian opportunity in the short-medium term. Ultimately, BE stock exemplifies the classic showdown between narrative-based fundamentals (which are admittedly poor) versus the market’s core demand profile for BE stock. I am bullish on Bloom, but my unconventional, options-focused thesis may not be suitable for risk-averse value hunters.
As a conventional strategy, investors may choose to mostly ignore BE stock, and for entirely justifiable reasons. Sure, Bloom posted better-than-expected results for its latest first-quarter earnings report. However, the beat largely stemmed from nuances in project timing and a one-off customer settlement. In other words, such matters do not represent a basis for sustainable growth. Plus, management’s reiteration of full-year guidance signaled no expectation for meaningful upward progress. The stock currently features an Underperform rating via TipRanks.
However, arguably the most worrying sticking point is Bloom CFO Daniel Berenbaum’s sudden departure after just 12 months in the job. Based on how the energy company framed the resignation, specifically by not discussing a transition period, there may have been difficulties related to the eventual parting of ways. Whatever the case, it’s difficult for shareholders to swallow, adding to concerns for BE stock.
Given the empirical data on demand and the confluence of factors surrounding the stock, I believe there is a risky but rational wager on the table.
Focus on the Behavioral Dynamics of BE Stock, Not Its Price Action
To clarify my approach, this is not intended to be a comprehensive analysis of Bloom Energy, its fuel-cell technology, or a detailed review of its Q1 results. That is beyond the purpose here. My focus is solely on demand and whether the market was a net buyer of BE stock or not. Everything else is secondary.
Many analysts would likely view this methodology as overly simplistic or binary, and that is precisely the point. Their critiques highlight the core strength of this framework. Demand is among the few metrics that can be meaningfully compared across different market environments. In contrast, price and financial performance indicators — such as revenue and earnings — are often anchored to shifting contexts and thus lose comparability over time.
By contrast, regardless of the prevailing conditions in prior periods, investors always had to be persuaded by certain factors to become net stock buyers. Put simply, while fear and greed fluctuate, these emotions remain among the few constants in market dynamics.
Viewed through this lens, BE stock — like any security — can be categorized, quantified, and analyzed probabilistically, not merely through price movements but as evolving behavioral states. More specifically, analysts can track the conditions under which bearish sentiment transitions to bullish sentiment, and vice versa.
In my view, this offers a far more robust and insightful approach than attempting to interpret the shifting narratives in the headlines.
For BE stock, the reversal signal that flashed was that in the past 10 weeks, it printed a “3-7” sequence: three weeks of upside interspersed with seven weeks of downside, with a negative trajectory across the period. Historically, whenever this sequence flashes, there’s been a 58.8% chance that the following week would see an upswing.
This is a significant pattern because BE stock has a slightly negative bias as a baseline. On any given week, there’s a 47.88% chance that a position entered at the beginning of the period will be profitable by the end of it. Thus, when the 3-7 flashes, the risk-reward asymmetry shifts from the bears to the bulls.
Of course, there are no guarantees in market forecasting. However, assuming that the positive pathway wins out, traders would see a gradual rise toward the $18 level over the next 10 weeks. If the negative pathway wins out, BE may deflate toward the $15 level.
Crafting a Bullish Options Strategy for Bloom Energy
For those wishing to capitalize on a struggling name that’s in store for a rebound, traders may consider the 17/18 bull call spread expiring May 30, 2025. Arguably, this spread represents the most aggressive multi-leg options strategy that you can buy while still touching rationality.
The above transaction involves buying the $17 call and simultaneously selling the $18 call, for a net debit paid of $50. Should BE stock rise through the short strike price of $18 at expiration, the maximum reward is also $50, a payout of 100%.
Assuming again that the positive pathway wins out, based on median volatility trends, BE stock is projected to reach $17.82 over the next four weeks. That’s the median projection, so the actual figure could be higher (or lower). That’s the risk one takes with these low-cost, high-payout debit spreads.
A more conservative trade is the 17/17.50 bull call spread expiring May 23. This transaction involves a net debit of $80, with a maximum reward of $70, or a payout of 87.5%. However, BE stock would be projected to reach $17.63 at expiration, thus eclipsing the short strike price.
How is Bloom Energy Rated by Wall Street Analysts?
On Wall Street, BE stock carries a Moderate Buy consensus rating based on nine Buy, eight Hold, and two Sell ratings over the past three months. BE’s average price target of $23.59 implies ~45% upside potential over the next twelve months.
Using Data Signals Instead of Following the BE Stock Narrative
While the prevailing narrative around Bloom Energy may not be particularly favorable, it’s important to remember that the market is driven by more than just stories. Ultimately, investors face a straightforward choice: to be net buyers of a security or not. At its core, the decision is that simple.
In the case of BE stock, there has historically been a specific pattern of demand behavior that has preceded notable shifts in sentiment — shifts that stand out from the stock’s typical statistical trends. Such insights are not easily gleaned from traditional fundamental analysis, which creates a potential opportunity for investors willing to take a contrarian stance.