Bloom Energy Corp. (NYSE:BE) shares are falling Wednesday as costly crude and a hot inflation print revive fears that U.S. interest rates will stay high, weighing on data center infrastructure stocks.
- Bloom Energy stock is taking a hit today. What’s behind BE decline?
Bloom Energy Falls as Rate Fears Hit Data Center Stocks
Investors are selling companies that build and equip data centers. Their worry is that expensive oil and stubborn inflation could keep interest rates high for longer. If financing stays costly, developers may pull back on new data centers, power infrastructure and other commercial construction. Slower building would reduce orders for electrical equipment and HVAC systems.
Crude oil is firm. WTI futures hovered near $94.25 a barrel in early New York trading, up 0.12%. The 10-year Treasury was yielding 5.20%. CME Group’s FedWatch tool puts the chance of a Fed hike after the October meeting at 21.6%.
Hot Inflation Hits Rate-Sensitive Stocks
Fresh inflation data reinforced those worries. Prices in September were 3.7% higher than a year ago, above the 3.6% economists projected. Excluding food and energy, core inflation hit 2.6%, topping the 2.5% projection. Stocks that react to interest rates came under pressure in premarket trading.
Treasury yields shot up while the dollar strengthened and gold retreated. The 2-year Treasury yield climbed 11 basis points to 4.91%, and the dollar index gained 0.4%. Skyler Weinand, chief investment officer at Regan Capital, said Wednesday’s report shows inflation is not easing and is going the wrong way.
Bloom Energy supplies fuel cells that provide electricity to data centers. Oracle named a Bloom fuel cell microgrid as the primary power source for its Project Jupiter data center in New Mexico.
Large projects depend heavily on financing. When rates rise, borrowing gets pricier, and developers may delay or downsize builds. Fewer or smaller projects could mean fewer orders for Bloom.
CoreWeave Bond Yield Spike Adds AI Financing Worries
CoreWeave Inc (NASDAQ:CRWV) debt is drawing attention as well. A chart that venture capitalist Chamath Palihapitiya shared tracks $1.25 billion of 2032 bonds. Their yield spiked to 15% at one point and closed at 14.5%, the highest close yet. Elon Musk reacted to the post with a one-word reply: “Yikes.” Palihapitiya warned of a possible “private credit bubble” around AI.
Because AI data centers rely on borrowed money, pricier credit for a major AI company could make lenders more cautious. That could slow the buildouts Bloom Energy supplies.
BE Shares Are Sliding
BE Price Action: Bloom Energy shares were down 9.87% at $237.46 at the time of publication on Wednesday, according to Benzinga Pro.
Image: Michael Vi/Shutterstock
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