FuelCell Energy Just Landed a Data Center Deal. How Should You Play FCEL Stock Here?

Green hydrogen by Scharfsinn via Shutterstock

As the digital world accelerates with artificial intelligence (AI), streaming, and cloud computing, data centers are turning into power-hungry giants. Keeping them cool, efficient, and low-emission is no small feat. That’s where fuel cells step in, generating clean electricity and usable heat from hydrogen, natural gas, or biofuels. They’re quickly becoming key to decarbonization. FuelCell Energy (FCEL), a long-time player in this niche, has been leveraging this tech with a focus on sustainable on-site solutions. It’s quietly scaling globally and now going bigger in Asia, especially South Korea.

Already operating the largest single-site fuel cell park in Korea, FuelCell just inked a Memorandum of Understanding (MOU) with Inuverse, a hyperscale data center developer, to explore deploying up to 100 megawatts (MWs) of fuel cell-based power starting in 2027. The project centers on the AI Daegu Data Center, which Inuverse is building.

This isn't just about power. We're talking absorption chilling, hot zone optimization, and clean waste systems — all driven by FuelCell’s platform. While FCEL stock surged on the news, it cooled just as fast, paring most of its gains. So, is FCEL still worth the chase?

Founded in 1969, Connecticut-based FuelCell Energy has been quietly powering a cleaner future. Specializing in direct fuel cell technology, the company turns hydrogen into electricity. With over 55 years of innovation, FuelCell has nearly 200 modules running globally. Currently valued at a $122 million market capitalization, FuelCell helps industries meet today’s energy needs while building a smarter, greener tomorrow.

FuelCell Energy’s stock chart in 2025 looks more like a rollercoaster than a rally. FCEL stock has tumbled 40% year-to-date (YTD), crashing to an all-time low of $3.58 in May and trading far from its 2024 high of $21.60. Zooming out, the long-term view is rough. FCEL is down 72% in a year and nearly wiped out over the past five years.

Still, sparks flew recently. After its second-quarter earnings report in June, the stock rose 40% in two days. Plus, the South Korea deal added fresh fuel, although the rally cooled almost as quickly.

Priced at 1.17 times sales, FCEL stock sits in a bargain bin. It looks like a deep-value bet if investors believe FuelCell’s technology and deals can finally spark sustained growth.

FuelCell Energy’s Q2 2025 earnings report, released on June 6, lit a fire under the stock despite generating losses. FCEL stock surged by double digits following the report, as investors looked past the red ink to focus on revenue momentum and a major restructuring plan. While the company reported a wider-than-expected loss of $1.79 per share, it narrowed by 18% year-over-year (YOY), signaling progress beneath the surface.

The real spark was the top line. Revenue jumped 67% YOY to $37.4 million, beating Wall Street estimates. This growth was fueled by fresh product revenue of $13 million, compared to zero in the prior year. Meanwhile, service agreements pulled in $8.1 million, supported by module replacements under a contract with United Illuminating. Although generation and advanced tech revenues dipped due to maintenance and scaled-back contracts with Exxon Mobil (XOM) affiliates, investors were encouraged by the broader top-line gains.

To sharpen its focus, FuelCell unveiled a major restructuring, impacting operations across the U.S., Canada, and Germany. The company plans to cut its workforce by 22%, following a 2024 cost-reduction effort. The aim is to achieve profitability, leaner operations, and a tighter focus on its carbonate platform.

CEO Jason Few made it clear. FuelCell is doubling down on its carbonate tech to meet rising demand from AI data centers and distributed energy needs. The company is cooling off on solid oxide projects and tightening SG&A costs to stay lean. CFO Michael Bishop backed it up, pointing to sharp cost control and smarter financing moves.

Meanwhile, the company ended the quarter with a solid $1.26 billion backlog, up 19% YOY, thanks to long-term deals like South Korea’s Gyeonggi Green Energy and a fresh 20-year agreement for a 7.4 MW fuel cell plant in Connecticut.

Analysts monitoring FuelCell anticipate its per-share losses to narrow by 19.3% YOY to $6.22 in fiscal 2025, then shrink further by 19.8% to a $4.99 loss in the next fiscal year.

Wall Street is not exactly cheering for FCEL stock right now. Overall, the stock has a consensus “Hold” rating. Of the eight analysts offering recommendations, six are choosing to stay on the sidelines with a “Hold” while the remaining two recommend a “Strong Sell” rating.

FCEL stock's average analyst price target of $8.93 implies 66% upside potential from current levels. However, the Street-high price target of $13.75 suggests that shares can rally as much as 156% from here.

FuelCell’s latest South Korea deal is not just another press release, but a signal that the company is still in the game, aiming to align its clean power tech with the growing needs of AI-driven data infrastructure.

The restructuring, revenue pop, and rising backlog all hint at a business trying to turn the corner. But FCEL stock’s wild swings, the company’s deep losses, and cautious Wall Street sentiment can’t be ignored. This still feels like a wait-and-watch story. The spark is there, but whether it turns into a steady burn or fizzles out remains to be seen.

On the date of publication, Sristi Suman Jayaswal 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. This article was originally published on Barchart.com