What happened
Shares of Bloom Energy (NYSE:BE) stock have not performed well this year. From the first trading day of 2019 to the first trading day of this week, Bloom stock lost nearly 50% of its value (47.4% of its price). But this week, a miracle happened.
On Wednesday, reports TheFly.com, investment banker JPMorgan laid out its forecast for the alternative energy sector in 2020. Within minutes, Bloom Energy stock was flying — up 8.7% from Tuesday's close on Wednesday, rising another 10.1% on Thursday, and finally closing today up a further 9.2% — 27.2% in total stock price gains since Monday.
So what
What was it that JPMorgan said that got Bloom Energy investors so excited? Surprisingly, none of the analyst's observations were particularly earth-shattering.
Solar and wind energy installations are expected to rise a respectable 10% year over year in 2020. Investment in the sector “at-trend” rates should work out to about $300 billion globally, with falling costs per watt of solar and wind energy collected and stored helping to encourage investment in green energy over hydrocarbons.
Granted, none of that refers to Bloom Energy specifically — which actually generates its energy by converting hydrocarbons, such as methane and ethanol, into electricity through fuel cells. But as TheFly observed in its note, one of JPMorgan's favorite stocks in this sector is Bloom Energy, which JP rates overweight.
Now what
That simple mention appears to have been enough to spark a rally in Bloom Energy stock. Whether it can keep the rally going will probably depend on how Bloom's Q4 earnings results look when they come out.
In that regard, last quarter, Bloom succeeded in earning $0.01 per share (albeit pro forma) when Wall Street had expected it to earn nothing. This quarter, it's task will be trickier. The Street is counting on Bloom to report a $0.02 per share pro forma profit.
JPMorgan's forecast may be enticing investors, but if Bloom fails to deliver that result, this week's gains could prove to be fleeting.