Energy demand in the U.S. continues its upward trajectory, driven primarily by the insatiable energy needs of data centers and their power-hungry artificial intelligence (AI) applications.

In light of this, companies are seeking sustainable solutions to meet their growing energy requirements. This is where Bloom Energy (BE 4.25%) comes into play. The company's fuel cell technology offers a scalable and reliable means for companies to meet their energy needs while simultaneously reducing their carbon footprint.

Over the past year, Bloom has secured several significant contracts. Here's what investors should know about this up-and-coming energy company and the investment opportunity it presents.

Bloom Energy's technology helps companies address growing energy demands

Bloom Energy specializes in designing, manufacturing, and deploying solid oxide fuel cell systems. Its Bloom Energy Servers use solid oxide technology to convert a variety of fuels, including natural gas, biogas, and hydrogen, through an electrochemical process without combustion. These servers can be clustered together to produce on-site electricity for commercial, industrial, or data center purposes.

Aside from cleaner energy production, Bloom's servers are appealing because this technology is ready to deploy today. The company can install these systems in less than 50 days, and this energy can be used to complement energy supplied by the grid. Companies can also install these servers to function independently, eliminating dependence on the grid altogether.

Image source: Bloom Energy.

This makes Bloom's product appealing, especially for technology companies looking to address their growing data needs today. According to estimates from Goldman Sachs, data center power demand could grow 15% annually through 2030, accounting for 8% of total power consumption in the U.S.

This boom in demand comes at a good time for Bloom Energy, which has struggled financially since going public in 2018. Over the past 12 months, the company lost $129.5 million against revenue of $1.26 billion. While the company has made progress and improved margins, securing big-name clients helps validate its offering and provides an on-ramp for further growth.

BE Revenue (TTM) data by YCharts

Bloom has scored several major deals this past year

In May, Bloom announced a power capacity agreement with Intel, which calls for the installation of additional megawatts of its Energy Serve at Intel's data center in Santa Clara. This will result in Silicon Valley's largest fuel-cell-powered high-performance computing data center.

The company also partnered with Nvidia-backed artificial intelligence (AI) hyperscaler CoreWeave to provide on-site power with its fuel cells, which are set for installation around the third quarter of this year.

A few months ago, it also signed an agreement with American Electric Power Company to purchase up to 1 gigawatt (GW) of its fuel cells for data centers and other large energy users. American Electric is one of the largest electric utility companies in the country, with a 39,000-mile transmission network. Morningstar called the deal "a potential game changer for Bloom."

Growth is on the way, according to analysts

The stock is a bit expensive, at 3 times its forecast sales this year and 50 times its forecast earnings. That said, signing agreements with several big names helps validate its product, and the successful deployment of its servers could help it grow very nicely over the next several years.

Analysts covering the stock project Bloom will turn a net profit in 2025, with generally accepted accounting principles (GAAP) earnings per share (EPS) of $0.11. It would be its first full-year profit since going public in 2018. They also project revenue growth of 18% to $1.67 billion in 2025 and 21% in 2026 to over $2 billion.

Should investors buy, sell, or hold Bloom Energy?

Bloom Energy's recent agreements with American Electric and technology companies are a big win. They allow the company to showcase its product and ability to provide quick-to-deploy, scalable energy solutions. Its agreement with American Electric is notable, as the energy company forecasts a 20% annual growth rate in commercial load over the next three years.

As with all growth stocks early in their growth stories, Bloom Energy comes with risk if its deals fall through. Its expensive valuation makes the stock vulnerable to a drop from here. That said, the company is making inroads with new agreements in the evolving energy landscape driven by AI demand and looks like a compelling growth stock for long-term investors to add today.