Bloom Energy (NYSE:BE) +2% in Wednesday's trading, overcoming early losses after HSBC downgrades the fuel cell maker to Hold from Buy while raising its price target to $24.50 from $17.20 on near-term valuation concerns following the stock's recent surge in response to a fuel cell supply deal for AEP data centers.

Bloom (BE) has plenty of excess manufacturing capacity in the near term but may need to increase capacity at its Fremont facility from ~750 MW to the GW scale by late 2025, and HSBC analyst Samantha Hoh says her estimates assume the company adds capacity gradually to its existing roofline while working capital continues to be a drag in the near term.

But Hoh sees Bloom (BE) generating positive free cash flow in 2026, accelerated from 2027 previously, and raises her distributable cash flow-derived stock price target to incorporate a higher long-term/terminal growth rate for a longer and stronger tailwind from AI data center demand.