FuelCell Energy's (FCEL) latest quarterly report gave investors plenty of reasons to worry on the surface. The fuel-cell developer missed Wall Street’s revenue expectations in fiscal second-quarter 2026, reporting sales of $35.6 million, down 5% year-over-year (YOY), while the company remained in losses. Yet despite the disappointing financial results, investors appeared unwilling to abandon the stock’s long-term story.
The reason is artificial intelligence (AI). As hyperscale AI data centers scramble to secure reliable power amid growing grid constraints, FuelCell Energy is positioning itself as a potential beneficiary of one of the biggest infrastructure buildouts in decades. The company is even expanding manufacturing capacity and rolling out standardized power solutions designed specifically for large AI-driven facilities.
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Thus, many analysts and investors are willing to look past weak quarterly revenue and focus instead on whether FuelCell can convert its rapidly growing AI-related pipeline into signed contracts and recurring revenue.
About FuelCell Energy Stock
FuelCell Energy is a clean-energy technology company that develops and manufactures fuel cell platforms designed to provide reliable, low-emission electricity for utilities, industrial customers, municipalities, and increasingly, AI-focused data centers. Headquartered in Danbury, Connecticut, FuelCell Energy has recently shifted its strategic focus toward addressing the growing power demands of AI infrastructure, a market management believes could become a significant growth driver. FuelCell Energy has a market cap of $1.12 billion.
FuelCell Energy’s stock has been one of the market’s most explosive performers in 2026, but the ride is far from smooth. Shares have delivered 154.5% returns over the past 52 weeks, and 131.2% year-to-date (YTD) as Wall Street increasingly embraced the company’s potential role in powering the next generation of AI data centers. The rally transformed FuelCell from a struggling clean-energy developer into one of the market’s hottest AI infrastructure trades.
As hyperscale data center operators search for reliable sources of power amid grid constraints, FuelCell Energy has positioned its fuel-cell technology as a potential solution. Investor optimism accelerated after management disclosed that its sales pipeline in Q2 had expanded 267% from Q1 2026 to 4 gigawatts. The company has also introduced a standardized 12.5-megawatt power block specifically designed for large-scale data center deployments and is expanding manufacturing capacity to meet anticipated demand. The stock is up 137.7% over the past three months.
However, the stock’s recent trading action highlights the volatility associated. The stock witnessed selling pressure after the company reported fiscal second-quarter 2026 results on June 8, sending the stock down 10.6% during the session.
Yet the very next day demonstrated why FuelCell remains one of the market’s most volatile AI-related names. On June 9, shares rebounded 12.8%, snapping a four-day losing streak as investors refocused on the company’s rapidly expanding AI data center pipeline rather than its near-term earnings weakness, only to again dip 7.3% in yesterday's session.
www.barchart.com The stock is currently trading at a premium compared to industry peers at 5.73 times sales.
Q2 Results Missed Expectations
FuelCell Energy reported fiscal second-quarter 2026 results on June 8. For the quarter ended April 30, revenue declined 5% YOY to $35.6 million, below expectations. The decrease was primarily driven by lower service revenue and lower generation revenue as the company’s Groton project underwent repairs. These headwinds were partially offset by higher product revenue from module deliveries to customers in Korea and stronger Advanced Technologies revenue.
Profitability deteriorated significantly during the quarter. Net loss widened to $77.6 million, compared with a net loss of $37.7 million in the second quarter of fiscal 2025. Gross loss increased to $12.9 million from $9.4 million a year earlier, while operating loss more than doubled to $77.9 million from $35.8 million in the prior-year quarter.
Adjusted EBITDA remained negative as the company continued investing in growth initiatives and project execution. Nevertheless, adjusted net loss per share improved to $0.53 from $1.53 in the prior-year period, but missed the consensus estimate.
Despite the weak earnings performance, FuelCell highlighted substantial progress in its AI-focused growth strategy. The company’s sales pipeline expanded 267% sequentially to 4 gigawatts, with the majority of opportunities tied to AI data centers and digital infrastructure customers.
To capitalize on this opportunity, FuelCell introduced a standardized 12.5-megawatt fuel-cell power block designed specifically for large-scale data center deployments. The company is also planning up to $275 million of investments to expand its manufacturing facility in Torrington, Connecticut, increasing annual production capacity from 350 megawatts to 500 megawatts.
In addition, management reported progress on its carbon-capture partnership with ExxonMobil Technology and Engineering Company, including shipment of the first carbon-capture modules to the Netherlands.
One area that remains a concern is backlog. Total backlog declined 9.9% YOY to $1.1 billion as of April 30, 2026, compared with $1.3 billion a year earlier.
Analysts predict loss per share to be $2.22 for fiscal 2026, an improvement of 49.7% YOY, but deteriorate 9% annually to $2.42 in fiscal 2027.
What Do Analysts Expect for FuelCell Stock?
Recently, TD Cowen raised its price target on FuelCell Energy from $9 to $16 while maintaining a “Hold” rating, following the earnings release.
On the other hand, Canaccord Genuity upgraded FuelCell Energy from “Hold” to “Buy” and sharply increased its price target from $12 to $30 per share, citing growing confidence that the company is nearing a landmark data center contract.
However, FCEL stock has a consensus “Hold” rating overall. Among the nine analysts covering the stock, one recommends a “Strong Buy,” six analysts stay cautious with a “Hold” rating, and two recommend a “Strong Sell” rating.
While the stock is trading above its average price target of $8.24, Canaccord Genuity’s Street-high target price of $30 suggests that the stock could rally as much as 80.8%.
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www.barchart.com On the date of publication, Subhasree Kar did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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