Bloom Energy stock slides amid AI power diversification bets and emerging competition in firm power provision.

Bloom Energy shares fell Wednesday after Hunterbrook released a short report questioning the fuel-cell company's China supply-chain disclosures and its ability to ramp up production to meet AI power demand.

Share prices dropped 7.6% to $249.00 by afternoon, with an intraday low of $235.79. The S&P 500 ETF declined 0.4%, while the Nasdaq 100 ETF was essentially flat.

The timing is significant because Bloom is viewed as a major AI power play. The San Jose, California-based company manufactures solid oxide fuel cells, which generate electricity through an electrochemical process rather than fuel combustion. Investors have positioned Bloom as a means to rapidly supply power to data centers while grid infrastructure upgrades remain underway.

Hunterbrook's investment arm held a short position at the time of publication and alleged that Bloom's operations depend on China-linked scandium supplies, contradicting earlier statements from CEO K.R. Sridhar that the company was not reliant on China. Hunterbrook identified four routes through which scandium-related materials—including scandium oxide and scandium-containing ceramics and powders—flow into Bloom's supply chain via intermediary nations.

By mid-afternoon, Bloom had not issued a detailed response. However, the company published a blog post Tuesday stating it has established a diversified global sourcing network and that its current scandium oxide supply chain "can support up to 25 GW per year" in production capacity. Scandium oxide, used in fuel-cell materials, is a "tiny ingredient," according to the post, but is critical for performance and durability.

Scandium exports from China faced new restrictions after officials placed the metal, its oxide, and related compounds on a controlled export list in April 2025. Exporters now require licenses under China's Ministry of Commerce and customs regulations.

Hunterbrook cited Eric Wachsman, director of the Maryland Energy Innovation Institute, who stated regarding Bloom's scandium sourcing: "I don't know of anywhere else they would get it from that's of the scale that they would need." He added that purification "tends to be primarily in China."

Bloom's most recent annual report claimed its supply chain does not depend on China, while also listing China as a source for several components, including rare earth metals and compounds used by certain suppliers. The filing noted that trade tensions could limit Bloom's access to these materials, though the company does not anticipate that China-sourced rare earth supplies will impact its 2026 production forecast.

The selloff occurred slightly more than a week after Bloom and Brookfield raised their AI infrastructure financing commitment to $25 billion from $5 billion. Aman Joshi, Bloom's chief commercial officer, remarked that Bloom was "uniquely positioned" to deliver "clean, reliable power" for AI, while Brookfield's Sikander Rashid stated the partnership can provide "end-to-end solutions, from electrons to tokens."

Bloom's growth strategy hinges on major customer contracts. In April, Oracle announced plans to purchase up to 2.8 gigawatts of Bloom fuel-cell systems, with 1.2 gigawatts already committed and deployment underway. Mahesh Thiagarajan, an Oracle Cloud Infrastructure executive, noted that Bloom's fuel cells help Oracle meet demand "across the United States."

Analyst sentiment was mixed even before the short report emerged. Jefferies maintained its Hold rating Monday with a $246 price target, while UBS issued a $350 target last week, according to Benzinga's analyst tracker.

Fuel-cell sector peers also declined, though Bloom's drop exceeded Plug Power's 1.4% loss and fell short of FuelCell Energy's 12.6% drop. Vertiv, which supplies power and cooling infrastructure for data centers and is considered an AI-related play, gained 3.2%.

Short sellers could overstate their case if Bloom's earnings report on July 28—or announcements regarding supplier diversification, production capacity, and customer deployment—exceed current expectations. The bear thesis is more straightforward: if challenges with scandium supply, permitting timelines, or customer deployment materialize, Bloom's AI power value proposition could face pressure on both revenue and valuation. The company is scheduled to release second-quarter results after the July 28 market close, with a conference call set for 5 p.m. ET.