Last week saw a rocky end to trading within the energy sector as fuel cell stocks declined across the board. While there was no clear reason why, much speculation centered around the uncertainty of Congress passing legislation that would increase government investment in sustainable tech. This week has started off on a better note, though, as Bloom Energy (NYSE:BE) announced a partnership agreement that has BE stock shooting up.
What Happened With BE Stock
Today began with the announcement that Bloom had reached an agreement with SK ecoplant to expand their previous partnership. This new deal includes a contract for Bloom to produce to a minimum of 500 megawatts of power through 2024, generating an estimated $4.5 billion in equipment and service revenues.
As expected, this news produced quick and positive results for BE stock, which shot up as soon as markets opened. As of this writing, it is up over 36% for the day.
Investors should also note that BE did not decline as much as some of its peers at the end of last week. FuelCell Energy (NASDAQ:FCEL) dropped by as much as 16% by the week’s close while Plug Power (NASDAQ:PLUG) fell by 4%. BE stock, though, only fell by 2.56%. Today’s gains have shares up by more than 30% for the past five days.
What It Means
As the clean energy boom has expanded, it’s become clear that fuel cell technology is going to play a part in the green revolution. Opportunity abounds for companies like Bloom that arrived early to the party.
This type of partnership is a good reminder of how they’ve been able to do it. Bloom’s partner in this venture is an affiliate of South Korean conglomerate SK Group, a prominent name in energy production, particularly across Asian markets. As the statement released by the company indicates, it will allow both parties to “fortify their market leadership in power generation and to establish market leadership in the hydrogen economy.”
Demand for green hydrogen is growing and this deal will include both companies building production facilities on both U.S. and Korean soil. American energy producers understand the importance of gaining prominence on a global scale, exactly what Bloom is continuing to do.
Why It Matters
On top of all this, it’s also worth noting that the equity investment in Bloom that SK ecoplant is targeting is roughly $500 million. With both the investment and extended partnership in mind, it’s clear that SK is impressed with Bloom’s work and that it wants to work together to corner an emerging market.
So what is the bottom line? InvestorPlace Markets Analyst Thomas Yeung recently named BE as a cheap stock for the green energy boom, citing the appeal of Bloom’s innovative tech for customers in the hospitality and manufacturing sectors.
The future is green for both Bloom Energy and its sector. Investors would be well-advised to pay attention.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.