Bloom Energy's backlog of fuel cell orders has reached a concerning 40-to-1 ratio, raising questions about the company's ability to scale production to meet datacenter demand.
Bloom Energy Corporation dropped 5.5% to $243 on Friday afternoon, giving back Thursday's minor rebound following a short-seller report and the company's response. The core concern troubling investors centers on the mathematics of Bloom's operations: the company's stated product backlog of approximately $20 billion stands at roughly 40.6 times its $492.6 million in remaining performance obligations from the latest quarterly statement.
While this disparity doesn't necessarily indicate improper accounting, the two metrics operate under distinct rules and timelines—a difference that matters significantly given Bloom's 2026 revenue guidance of $3.4 billion to $3.8 billion and adjusted operating income between $600 million and $750 million. The company must move large data-center projects from the financing stage into actual installation on schedule to meet these targets.
Broader fuel-cell equities weakened alongside Bloom. The S&P 500 ETF gained 0.3%, while FuelCell Energy fell 8.7% and Plug Power declined 5.3%.
Bloom defines product backlog as the expected revenue from already-signed deals, with estimated investment-tax credits included. For services, backlog reflects maintenance contracts running five to 20 years, though customers can terminate them annually. "Remaining Performance Obligations," or RPO, represents contracted revenue for work not yet completed; Bloom excludes contracts lasting one year or less and some services billed on a time-and-materials basis. Product RPO encompasses installation commitments as well. The two measures use different measurement dates and definitions, making direct comparison imprecise.
Total RPO grew 17.5% from December 31 to March 31, and customer deposits surged 93% to $151.1 million. However, investors lack transparency on how much of the $20 billion backlog is cancellable, contingent on tax incentives, or falls outside RPO.
A more troubling figure emerged: Bloom generated $373.3 million in related-party revenue in the first quarter—nearly half of total sales and a sharp jump from $2.8 million a year prior. These transactions involve entities connected through ownership or joint-venture arrangements, with ties to Brookfield Asset Management. On June 30, Bloom and Brookfield expanded their project-finance agreement to $25 billion from $5 billion. While such structures accelerate funding, meaningful revenue arrives only when the end-user data-center begins actual deployment.
Hunterbrook Media, which operates an investment fund betting against Bloom shares, raised supply-chain concerns about scandium sourcing. Scandium oxide enhances the ceramic electrolyte in Bloom's fuel cells. Eric Wachsman, director of the Maryland Energy Innovation Institute, confirmed to Hunterbrook that most scandium purification occurs primarily in China.
Bloom denied the allegations in a July 9 filing, contesting both the supply-chain and accounting claims. The company stated it maintains sufficient scandium inventory for current demand and can support 25 gigawatts of annual fuel-cell manufacturing capacity. "No single supplier determines our destiny. No single country does either," wrote Chief Operating Officer Satish Chitoori. The filing, however, did not reconcile the backlog and RPO discrepancy.
Sell-side analysts largely remained bullish. Baird maintained an Outperform rating with a $310 price target following the earnings release. Susquehanna raised its price target to $298 from $293 on Friday, maintaining its Positive rating.
Key downside risks include delays in major AI infrastructure projects, sluggish conversion of joint-venture sales to end-user installations, or elevated scandium costs. Bullish investors are monitoring second-quarter results for evidence of continued RPO and deposit growth, reduced related-party revenue concentration, and stable margins. Bloom will report earnings after the market closes on July 28.