UBS reiterates Buy on Bloom Energy, arguing that concerns about scandium supply are overplayed by the market

Overview

This report is UBS company research on Bloom Energy Corp. The core conclusion is a reaffirmation of the Buy rating and the view that the recent stock decline driven by raw-material, especially scandium supply, concerns offers an attractive buying opportunity. UBS argues that the market has misread limited supplier and procurement disclosures as material unavailability, a view that is inconsistent with the company’s execution history, supplier relationships, capacity planning, and strategic partner confidence.

Core views

UBS believes that Bloom Energy’s scandium supply risk is overstated. The company has built a diversified global supply network with redundancy and is reducing reliance on primary mines by recovering scandium oxide from existing industrial off-gas streams. Management says this supply chain can support up to 25GW annual capacity, while current capacity is below about 2GW and the Fremont plant can be expanded to about 5GW, so scandium availability should not become a near- to mid-term constraint for capacity growth. The company has also developed substitute materials that perform similar functions within fuel-cell architecture, further strengthening long-term supply-chain resilience.

Analysis framework

The report mainly argues its investment view from five angles: supply-chain availability, expansion headroom, substitute-material R&D, commercial partner diligence signals, and valuation multiples, and contrasts bearish market narratives with company disclosure, management commentary, and major partner behavior.

Methodology notes

• Valuation methodsEV/Sales multiple approach

  Enterprise value multiple valuation based on 2028 sales forecast

  UBS’s target price is based on applying a 12.75x EV/Sales multiple to 2028 revenue of US$8,844 million, then subtracting net debt and minority interests to arrive at a per-share target of US$350.

• Supply chain analysisSupply redundancy and constraint assessment

  Comparing key raw-material supply capacity against current and planned capacity demand

  The report compares the maximum 25GW annual capacity supported by the scandium oxide supply chain with the company’s current sub-~2GW capacity and Fremont’s ~5GW expansion potential to assess whether scandium is a near- to mid-term constraint.

• Scenario and riskRating framework and expected stock return

  12-month expected price appreciation plus dividend yield

  UBS defines expected stock return as expected price appreciation over the next 12 months plus total dividend yield. In this report, price appreciation is 37.6% and dividend yield is 0.0%, so expected stock return is 37.6%.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Bloom Energy Corp (BE.US)

  Core coverage name

  Strengths

  It has a solid oxide fuel cell platform, scalable supply chain, scandium recovery process, substitute-material development capability, and strategic partner endorsements from Brookfield, Oracle, and AEP.

  Weaknesses

  Disclosures on key suppliers and procurement arrangements are limited, and low disclosure levels make it easy for the market to interpret this as insufficient material availability; valuation is sensitive to high growth expectations.

  Comparison

  The report argues that the market’s bearish narrative is overly focused on a single scandium supply risk, while ignoring the wide gap between the company’s current capacity and available supply support, as well as the due diligence likely already completed by large infrastructure investors.

  Risks

  The most near-term risk is raw-material cost inflation; additional risks include slower-than-expected capacity expansion, confidence swings from limited supply-chain disclosure, delays in partner project execution, and multiple contraction.

Key data

• 12-month ratingBuyUBS maintains a Buy rating.
• 12-month target priceUS$350.00Based on 2028 revenue forecast and a 12.75x EV/Sales multiple.
• Current priceUS$254.29As of 2026-07-08.
• Projected price upside37.6%Forecast price appreciation as disclosed in the table.
• Projected stock return37.6%Dividend yield is 0.0%.
• Market return assumption9.2%Used to calculate excess projected return.
• Projected excess return28.5%Projected stock return minus market return assumption.
• Current capacityBelow about 2GWReport states current production capacity is below about 2GW.
• Fremont plant expansion capacityAbout 5GWReport states the Fremont manufacturing facility can be expanded to about 5GW.
• Scandium oxide supply-chain support capacityUp to 25GW annual capacityManagement says the current diversified global supply chain can support this scale.
• 2028 revenue forecastUS$8,844 millionSales forecast used by UBS for target-price valuation.
• Brookfield partnership sizeUS$25 billionExpanded from US$5 billion, part of a Brookfield AI Infrastructure Fund-related partnership.

Impact & implications

If UBS’s thesis is correct, market concerns around raw-material supply bottlenecks may have already over-discounted the stock, and Bloom Energy’s execution on expansion, progress on strategic-partner collaborations, and AI infrastructure-related demand could become catalysts for valuation recovery. From a valuation perspective, the target price implies substantial upside; fundamentally, key points to monitor are supply-chain transparency, manufacturing ramp, order conversion, and raw-material costs.

Risks

• Raw-material cost inflation is the near-term risk explicitly cited as the largest.
• If actual scandium oxide supply-chain availability is lower than management stated, capacity expansion could be affected.
• The company’s limited disclosure on suppliers, purchase volumes, and procurement strategy could continue to raise market skepticism.
• If Fremont expansion and realization of future demand fall short of expectations, the high-growth valuation framework would be weakened.
• If collaborations with Brookfield, Oracle, and AEP progress more slowly than expected, confidence in execution capabilities could be hurt.

What to watch

• Further disclosure or third-party verification of the scandium oxide supply chain.
• Progress on Fremont’s expansion toward about 5GW capacity.
• Implementation pace of projects after Brookfield partnership expansion from US$5 billion to US$25 billion.
• Order book and commercialization progress from partners such as Oracle and AEP.
• Actual delivery of 2026E to 2028E revenue, EBIT, and EPS forecasts.
• Whether raw-material cost inflation affects gross margins and target-price assumptions.