Bloom Energy shares have pulled back sharply over the past several months, giving up a portion of the gains posted earlier in the year when the stock reached a record peak. The stock recently traded down to $218, its weakest level since September 3. With quarterly financial results due later this week, market participants are positioning for a potentially wide trading range.
Options market prices a large earnings move
Derivatives traders are anticipating significant volatility around the print. Data from Barchart shows an implied volatility reading of 131% for Bloom Energy, well above the 83% historical volatility figure. That gap suggests option premiums are rich relative to recent realized price swings.
The options chain offers a mixed picture on positioning. The put/call volume ratio stands at 0.51, indicating heavier call activity than put activity on the day. However, the put/call open interest ratio is 1.01, meaning outstanding put contracts slightly outnumber open call contracts. Call open interest is clustered around the $250 strike, roughly 14% above the current price, while put open interest is concentrated at $220.
Those levels echo the stock's recent earnings reactions. Shares fell 14% following the July report, after having jumped more than 20% in the wake of first-quarter results.
What the report could reveal about growth
The upcoming release matters because it should shed light on how the company's business is faring amid the ongoing artificial intelligence buildout. Of particular interest is any update on Project Jupiter, a development being constructed by Oracle. Oracle recently declared force majeure on the project amid significant challenges, including issues tied to the natural gas that would power it. Bloom was selected as the service provider in an arrangement expected to be worth millions of dollars over time.
Investors will also watch the order book for signs of demand durability. In the prior quarter, revenue climbed 165.5% to $1.065 billion, gross margin reached 33.4%, and operating margin came in at $182.2 million. Management also stated that its business had become the standard for AI on-site power.
For the third quarter, analysts expect revenue of $1.07 billion, a 106% increase. Full-year revenue is projected at $4.12 billion, up 103% from the prior year, according to management guidance tracked by the market.
Technical picture
On the daily chart, the stock has retreated from a September high near $300 to around $225. The pullback began after the shares established resistance at that $300 level. The price has slipped below a major support/resistance pivot from the Murrey Math Lines tool, though it has found its way to the 200-day Exponential Moving Average, a level often watched for trend support.
That setup leaves open the possibility of a rebound toward the psychological $250 mark. A sustained move above that threshold could open the door to a retest of $300. Conversely, a break below the $200 support level would undermine the constructive technical case.
This article is for informational purposes only and does not constitute financial advice.
