Key Takeaways
- Shares of Bloom Energy declined approximately 7% Thursday following Oracle’s force majeure declaration concerning the Project Jupiter AI data center in New Mexico.
- Oracle shares slid nearly 5% on the identical announcement while facing additional questions about its artificial intelligence capital expenditure timeline.
- A critical gas pipeline required to energize the New Mexico facility has been postponed from August 2026 to February 2027.
- Bloom’s recent S&P 500 entry sparked a classic “sell the news” movement, compounding downward pressure.
- Investors facing a securities class action against Bloom must file lead-plaintiff motions by September 28.
Bloom Energy (BE) shares tumbled up to 7% Thursday, while Oracle (ORCL) experienced a nearly 5% decline during the same trading session. The selloff followed Bloomberg’s disclosure that Oracle issued a force majeure declaration connected to Project Jupiter, a substantial AI data center currently being developed in New Mexico.
The connection is clear: Bloom Energy’s advanced fuel cell technology is designated to provide electrical power to Project Jupiter upon completion. This direct relationship explains why developments affecting the New Mexico project impacted Bloom’s valuation nearly as severely as Oracle’s.
According to reports, Oracle delivered the formal notice to Blue Owl, the project developer. The strategic objective appears focused on shielding Oracle from potential cost overruns should the facility miss its scheduled 2028 launch, rather than signaling withdrawal as the primary anchor tenant.
An Oracle representative confirmed to Bloomberg that the tech giant stays “fully committed to New Mexico” and maintains confidence in the project’s trajectory. However, the spokesperson declined to comment specifically on the force majeure declaration.
Even before Thursday’s announcement, Project Jupiter had encountered financing hurdles. Debt instruments totaling $18 billion associated with the development recently changed hands at 89 to 91 cents per dollar, indicating financial institutions have faced challenges distributing the loans to institutional buyers.
Natural Gas Infrastructure Setback Compounds Challenges
A critical natural gas pipeline essential for powering the data center complex has experienced schedule slippage. The completion timeline has shifted from August 2026 to February 2027 due to complications securing right-of-way permissions.
This postponement carries significant implications for Bloom since its fuel cell systems require natural gas infrastructure to function. Any construction delays directly impact when Bloom’s technology can begin producing income from the facility.
Bloom’s share decline also coincided with its formal entry into the S&P 500 index. Market participants frequently liquidate positions after broadly anticipated catalysts materialize, and this familiar dynamic likely contributed to Thursday’s weakness.
Climbing Treasury yields and elevated crude oil prices created additional headwinds for growth-focused equities like Bloom throughout the week. Separately, Bloom confronts a September 28 cutoff for investors seeking lead plaintiff status in a securities fraud lawsuit alleging the company concealed its dependency on Chinese scandium supplies.
Analyst Perspectives on the Two Companies
Oracle’s core operations continue demonstrating robust expansion. First fiscal quarter revenue jumped 30% year-over-year to $19.3 billion, while cloud services revenue surged 62% to $11.6 billion.
Oracle closed the period with $664 billion in backlog represented by remaining performance obligations. Executives disclosed the company deployed over 300,000 GPUs to cloud infrastructure clients and brought 850 megawatts of additional data center capacity online during the quarter.
Of 32 Wall Street analysts tracking Oracle, 27 maintain Buy ratings, four recommend Hold positions, and one suggests Sell. The consensus price objective stands at $245.75, representing roughly 79% upside from present trading levels.
Bloom’s collaboration with Oracle extends well beyond a single project. In April, both parties expanded their strategic agreement to encompass up to 2.8 gigawatts of electricity capacity, with 1.2 gigawatts already formalized under contract.
Bloom has emphasized its proprietary 800-volt direct current architecture as delivering economic advantages for emerging AI infrastructure. Company projections suggest this innovative configuration could reduce non-computing capital requirements by $3.6 billion for a theoretical one-gigawatt data center installation.
Among 18 sell-side analysts following Bloom, 10 assign Buy recommendations and eight maintain Hold ratings, producing a Moderate Buy consensus view. The average price target reaches $281.39, approximately 11% above current market prices.
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