By Bloom Energy (NYSE: BE) soared nearly 25% on Wednesday after posting a blowout third-quarter and raising its full-year guidance on the ever-increasing AI-related power demand.
Part of this rally is attributed to the company’s $5.0 billion artificial intelligence infrastructure deal with Brookfield Asset Management in mid-October as well.
However, there still are three major reasons to sell Bloom Energy stock following its post-earnings surge. Note that the power company is now trading at nearly 9x its price in late April.
Insiders are selling Bloom Energy stock – aggressively
Investors should consider pulling out of BE shares at current levels mostly because the company’s insiders have been unloading them since the start of 2025.
Barchart data confirms at least 19 separate stock sales and not even a single buy transaction from insiders over the past six months – indicating they’ve been cashing out as Bloom Energy continued to push higher.
This persistent selling suggests those closest to the company (executives and board members) now see the stock as overpriced, with limited potential for further upside heading into 2026.
Sure, insider selling isn’t inherently bearish – but the absence of any buying activity at all in case of Bloom Energy raises concerns about insider confidence in the company’s long-term prospects and valuation upside.
When insiders consistently cash out while retail investors pile in on momentum, it often signals a disconnect between public enthusiasm and internal expectations.
For Bloom Energy shares up nearly 800% versus their year-to-date low, it’s a signal that must not be ignored.
BE shares valuation warrants cutting exposure
What’s also worth mentioning is that BE stock’s valuation currently sits in the nosebleed territory.
According to Barchart, the power company is going for a forward price-to-earnings (P/E) multiple of well past 4,000 at the time of writing, which dwarfs even the best-of-breed AI stocks like Nvidia at about 45 only.
While Bloom Energy’s exposure to AI-driven power demand is exciting, such an overly stretched multiple implies it’s priced to perfection already – a major red flag for seasoned investors.
Market is essentially betting on flawless execution, rapid scaling, and sustained margin expansion – all without hiccups.
Any stumble, delay, or macro headwind could, therefore, trigger a sharp re-rating.
At this valuation, even strong quarters may fail to justify further gains, making BE vulnerable to profit-taking and unusual volatility.
Wall Street recommends pulling out of Bloom Energy
Wall Street estimates also warrant caution in playing Bloom Energy shares at current levels.
Following the earnings, BTIG analysts raised their price target on the power stock to a Street-high $145 – roughly in line with where it’s trading already.
UBS also maintained its “buy” rating on BE stock today, but its upwardly revised price target of $115 actually suggests potential “downside” of more than 17% from here.
This divergence in analyst sentiment reinforces caution around the company’s valuation and execution risk.
While the Brookfield partnership is a major win, it’s in early-stage only and subject to deployment timelines.
Additionally, Bloom’s net loss to common shareholders in the third quarter was $23 million, reminding investors that profitability remains elusive on a GAAP basis.
With expectations sky-high and insider selling rampant, the prudent move may be to lock in gains in Bloom Energy stock before gravity kicks in.
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