This ‘picks-and-shovels’ AI play is breaking out of resistance after seven years, the charts show
After seven years of trying to break through resistance, Bloom Energy (BE) has finally done it. Bloom Energy is known as a “picks-and-shovels” infrastructure play for the booming artificial intelligence build-out. Prior to the AI-boom, BE was focused on being a clean distributed power provider for businesses that needed reliability and lower emissions. Now, BE provides on-site power generation boxes (sometimes called Bloom Boxes) that supply always-on electricity with lower carbon emissions than the grid, that can also run on hydrogen with zero emissions, to hospitals, factories, utilities, and — you guessed it — also to data centers. In fact, Bloom just signed a deal with Oracle to supply power to their data centers. AI data centers are power hogs. Training and running large AI models requires a ton of electricity. Bloom’s solid oxide fuel cells can sit next to the data centers and generate clean, reliable power around the clock and independent of the grid. Again, Bloom is not a chips / GPU play like Nvidia, but it helps solve the energy bottleneck that AI power demand is creating. Looking at the weekly chart, you can see the seven-year resistance (price ceiling level) that’s been tested three times. Just last month, price finally closed above the $38 level creating a breakout. Thus far in August, we’re holding above the newly formed support level and, as a result, we’ve begun building positions in our Active Opps model at Inside Edge Capital . Notice the cumulative shares traded in July of 240 million, the second-largest on record. The massive volume done in July and November 24 is certainly investors discounting the massive expected swing into profitability in 2026 to 53 cents GAAP earnings per share following a loss of 5 cents per share in 2025 as shown at the bottom of the weekly chart. Not shown is non-GAAP earnings that swung into profitability in 2024 with 28 cents per share earned compared to 10 cents per share lost in 2023 and a loss of 41 cents per share in 2022. Turning to the daily chart, we get a closer look at the seven-year $36-$38 resistance zone that was heavily traded in late July and early this month before finally pushing higher. That big volume spike on July 24 was the date the Oracle deal was announced . The prior three quarters showed a solid swing into profitability and consistent top line growth (red rectangle). The next three quarters look to be quiet in terms of growth, but again I believe investors are building positions ahead of the 2026 swing into more defined profitability. Turning back to entry tactics, the stock is down about 7% as a type of news that Vanguard trimmed its holding by about 0.3% but still owns approximately 19 million shares. The company is also showing about 9% short interest with an expected three days required to cover that short based on average daily trading activity. In our Active Opps portfolio, we just established a 3% allocation and will look to increase the stake to 5% or more if the key $38-$36 newly formed support zone holds. -Todd Gordon, Founder of Inside Edge Capital, LLC We offer active portfolio management and regular subscriber updates like the idea presented above. DISCLOSURES: Gordon owns BE personally and in his wealth management company Inside Edge Capital. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
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