Canaccord Genuity upgrades Fuelcell Energy to Buy, citing a 4 GW pipeline and standardized 12.5 MW blocks for AI data centers. Shares jump 9.6% despite wider Q2 loss.
Fuelcell Energy’s stock surged on Tuesday after Canaccord Genuity upgraded its rating and pointed to a rapidly growing project pipeline that puts the fuel-cell specialist at the center of the artificial intelligence buildout. The shares jumped 9.6% to €14.56, recovering a chunk of the ground lost in a 33% selloff the previous week. The upgrade, from Hold to Buy with a sharply higher price target, reflects the bank’s expectation that the company will secure a significant data center contract before its fiscal year ends.
The pipeline has swelled to four gigawatts, a 267% quarter-over-quarter increase, with about 89% of that volume coming from data center customers. Fuelcell Energy is pushing standardised 12.5-megawatt power blocks designed to provide on-site electricity for AI developers who face tight grid connection timelines. The product aims to accelerate installation and give hyperscalers an alternative to waiting for new transmission lines.
The company’s second-quarter results, released Monday, showed the cost of that pivot. The net loss widened to roughly $78 million from $38.8 million a year earlier, reflecting special charges related to the Groton project. Revenue slipped 5% to $35.6 million. Despite the red ink, the balance sheet remains solid: cash and equivalents stood at $441 million at the end of April, and the company carries virtually no debt.
Should investors sell immediately? Or is it worth buying Fuelcell Energy?
Management is betting that cash will fuel production expansion at its Torrington, Connecticut facility, where annual capacity is set to climb from 350 to 500 megawatts. The buildout carries a price tag of $200 million to $275 million and a two-year timeline. The new standardised 12.5 MW blocks are central to the strategy, offering a plug-and-play solution for power-hungry AI clusters.
The stock has more than doubled since the start of the year, but remains 40% below its May high of €23.73. That peak was set before the recent selloff and the earnings disappointment. On the flip side, the shares have rallied more than 320% from the August 2025 trough of €3.36. The next major catalyst will be the third-quarter report due in September 2026, when investors will look for evidence that the data center pipeline is converting into revenue. For now, the market is giving management the benefit of the doubt, betting that AI’s insatiable electricity appetite will eventually fill Fuelcell Energy’s order book.
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