Modern AI server racks require significantly higher power density, and data centers in general require far more power than their traditional counterparts. Hyperscaler data center campuses require hundreds of megawatts (MWs), and some exceed a gigawatt (GW), including those of Meta Platforms and Microsoft.
Technology companies face a massive bottleneck: clean, reliable power. In recent years, power equipment providers have seen an unprecedented surge in demand. Bloom Energy (BE -11.18%), which manufactures solid-oxide fuel cells, is one company whose business is booming.
Meanwhile, utility companies that can provide energy today and have potential for further expansion are also seeing business pick up. Constellation Energy (CEG -6.13%), which owns and operates the largest nuclear energy fleet in the U.S., is a merchant power producer whose stock surged coming into this year.
With AI power demand projected to keep growing, Bloom Energy and Constellation Energy are two stocks that should benefit. But which one is a better investment today? Let’s dive into the businesses to find out.
Image source: The Motley Fool.
Bloom Energy is seeing staggering demand for its power equipment
In the energy sector, many power equipment manufacturers are seeing incredibly strong demand. That’s because surplus grid capacity is largely spoken for, and connecting AI data centers to the grid through traditional utility transmission upgrades can take up to seven years. For this reason, hyperscalers are prioritizing behind-the-meter, on-site power solutions.
Major hyperscalers, neoclouds, AI labs, and co-location operators have validated Bloom Energy’s solid-oxide fuel cells, which can run on natural gas, biogas, hydrogen, or other fuel blends. What sets it apart is how quickly it can power facilities. Bloom’s fuel cells can be delivered, installed, and ready to power data centers in months, not years — a massive advantage for technology companies looking to get their data centers running soon.
BE – Bloom Energy
$211.86-$26.67 (-11.18%)
NYSE · As of 3:09 PM ET 10/22/26
Bloom’s technology is the primary power source for Oracle‘s Project Jupiter campus, a massive multibillion-dollar data center in New Mexico that spans 700 acres. Oracle was one of its first AI-focused customers to validate the technology, and its campus will use 7,000 of Bloom’s solid oxide fuel cells. Bloom is also partnering with Brookfield Asset Management, which earlier this year expanded its financing framework from $5 billion to $25 billion.
In the second quarter, Bloom’s revenue hit a record $1 billion, up 166% year over year and marking the company’s first billion-dollar quarter. It raised its earnings guidance to a range of $3.9 billion to $4.2 billion, representing a doubling of revenue, while gross margins and profitability improved.
Constellation Energy is locking in long-term power deals with hyperscalers
While Bloom Energy has emerged as a leading power equipment provider for data centers, Constellation Energy is a leading merchant power provider that consistently makes headlines for its hyperscale data center deals.
On Oct. 6, Constellation entered into a 20-year power purchase agreement (PPA) with Alphabet‘s Google, which will help it bring an additional 890 megawatts (MW) of new nuclear energy capacity to the PJM Interconnection grid covering some 13 states. In addition, Constellation has PPAs with Amazon, Microsoft, and Walmart, all of which partnered with Constellation because of its large nuclear fleet.
CEG – Constellation Energy
$254.14-$16.60 (-6.13%)
NASDAQ · As of 3:09 PM ET 10/22/26
Constellation operates as an independent power producer, meaning it owns and operates power plants and sells electricity into the open market or through large long-term PPAs. Unlike regulated utilities, Constellation doesn’t own transmission or distribution lines. Government regulators don’t set its rates, so it benefits when power prices rise.
Bloom Energy vs. Constellation Energy: Which stock is a better fit for you?
Bloom Energy and Constellation Energy have surged, with Bloom up a staggering 1,427% and Constellation up 128% since the start of 2024. However, both stocks have been highly volatile given their close ties to the AI build-out narrative, and both are down 35% from their 52-week highs.
Analysts covering Bloom Energy project earnings per share could grow 85% from this year’s expected EPS and another 64% by 2028. Analysts project Constellation’s earnings to grow about 10% next year and another 26% by 2028.
Bloom investors are pricing in more growth, with the stock trading at about 45 times next year’s projected EPS. In comparison, Constellation Energy is valued at around 19 times next year’s projected EPS.
Investors seeking aggressive growth and who believe Bloom can scale to meet growing demand should invest in Bloom Energy. However, if you’re seeking exposure to the AI power boom and prefer a more stable investment in a company with vast power resources that also pays a dividend, Constellation Energy is the stock for you.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
