2 hours ago
5
Key Takeaways
- Shares of Bloom Energy declined approximately 7% on Thursday following Oracle’s force majeure notice related to Project Jupiter, a data center facility in New Mexico.
- Oracle’s shares simultaneously fell around 5% amid questions about its artificial intelligence infrastructure investments.
- Construction of the critical natural gas pipeline for the New Mexico facility has been postponed from August 2026 to February 2027.
- The timing coincided with Bloom’s S&P 500 addition, creating a classic “sell the news” market reaction.
- Bloom faces an upcoming September 28 deadline for lead plaintiff motions in an ongoing securities class action case.
Bloom Energy (BE) shares experienced a significant selloff Thursday, plunging up to 7%, while Oracle (ORCL) simultaneously shed nearly 5%. The dual decline followed reports from Bloomberg indicating that Oracle had issued a force majeure notification concerning Project Jupiter, an ambitious AI-focused data center being developed in New Mexico.
The connection between the two companies centers on Bloom Energy’s fuel cell technology, which is designated to provide electrical power for Project Jupiter upon completion. This interdependence explains why developments affecting the New Mexico project impacted Bloom’s stock performance nearly as severely as Oracle’s.
According to reports, Oracle transmitted the force majeure notification to Blue Owl, the project developer. The strategic move appears designed to shield Oracle from potential financial penalties should the facility miss its scheduled 2028 launch date, rather than indicating an exit from its role as the primary tenant.
When contacted by Bloomberg, an Oracle representative emphasized the company’s “full commitment to New Mexico” and expressed confidence in the overall strategy. However, the spokesperson declined to provide specific commentary on the force majeure notice.
Even before Thursday’s announcement, Project Jupiter had been navigating financial headwinds. Approximately $18 billion in loans associated with the development were recently changing hands at 89 to 91 cents per dollar, suggesting financial institutions have encountered difficulty syndicating the debt.
Infrastructure Setback Compounds Challenges
Construction of the essential natural gas pipeline required to power the data center campus has experienced significant delays. The completion timeline has been pushed back from August 2026 to February 2027 due to complications securing right-of-way approvals.
This postponement carries substantial implications for Bloom, as the company’s fuel cell systems require the natural gas infrastructure to operate. Every delay in the construction schedule correspondingly postpones the point at which Bloom can begin generating income from its equipment at the facility.
The stock decline also followed immediately after Bloom’s formal inclusion in the S&P 500 index. Market participants frequently engage in profit-taking after anticipated events materialize, and this dynamic appeared to contribute to Thursday’s downturn.
Broader market conditions, including elevated Treasury yields and climbing oil prices, applied additional downward pressure on growth-focused equities like Bloom throughout the week. Compounding these factors, the company confronts a September 28 deadline for lead plaintiff appointments in a securities class action suit alleging the company made misleading statements regarding its dependence on Chinese scandium supplies.
Analyst Sentiment on Both Stocks
Despite the recent turbulence, Oracle’s fundamental business continues demonstrating robust expansion. First-quarter fiscal revenue jumped 30% year-over-year to reach $19.3 billion, while cloud services revenue surged 62% to $11.6 billion.
The company concluded the quarter with $664 billion in remaining performance obligations on its books. Leadership reported deploying over 300,000 GPUs to cloud clients and bringing 850 megawatts of additional data center capacity online during the reporting period.
Wall Street’s consensus on Oracle remains strongly positive. Of 32 analysts tracking the stock, 27 assign it a Buy rating, four recommend Hold, and just one suggests Sell. The average analyst price target stands at $245.75, representing approximately 79% upside potential from current trading levels.
The Oracle-Bloom partnership extends well beyond Project Jupiter. In April, the companies announced an expanded collaboration targeting up to 2.8 gigawatts of total power capacity, with 1.2 gigawatts already contractually committed.
Bloom has highlighted its proprietary 800-volt direct current architecture as delivering meaningful cost savings for next-generation AI infrastructure. Company projections suggest this technological approach could reduce non-compute capital expenditures by $3.6 billion for a theoretical one-gigawatt data center installation.
Analyst coverage of Bloom Energy shows 10 Buy ratings and eight Hold ratings among 18 total analysts, yielding a Moderate Buy consensus. The average price target of $281.39 implies approximately 11% upside from present levels.
The post Bloom Energy (BE) Stock Tumbles 7% Following Oracle’s Force Majeure Notice on Project Jupiter appeared first on Blockonomi.
English (US) ·