FuelCell Energy (FCEL) shares surge 12.67% on two-day 16.08% rally driven by strategic shift, strong Q2 revenue

FuelCell Energy, Inc. (FCEL) shares surged 12.67% on Wednesday, marking a two-day rally of 16.08% and pushing the stock to its highest level since September 2025. The intraday gain of 13.55% highlighted renewed investor confidence, driven by strategic realignments and sector-specific demand.

The company’s Q2 FY2025 results revealed a 67% year-over-year revenue increase to $37.4 million, fueled by product sales and expanded service agreements. A strategic shift toward carbonate-based distributed generation systems for data centers has positioned FCEL to capitalize on the growing demand for reliable, low-emission power in high-density computing facilities. Partnerships, including the Dedicated Power Partners joint venture, aim to accelerate market penetration in this niche.

Operational restructuring efforts, including a 22% workforce reduction in June 2025, underscore the company’s focus on cost discipline. While these measures have reduced operating expenses, FCEL continues to report net losses, with a Q2 net loss of $37.7 million. The company has paused R&D for non-core platforms to prioritize commercially viable carbonate technology, aiming to lower cash burn and improve financial sustainability.

Backlog growth to $1.26 billion in Q2 FY2025, driven by long-term service agreements and power purchase agreements, reflects strong project execution. However, production capacity remains a constraint, with the Torrington facility operating at 31 MW annually, below the 100 MW target needed for positive Adjusted EBITDA. Management has shifted production to align with contracted demand, which may delay near-term revenue recognition.

Despite liquidity challenges—cash reserves fell to $240 million as of April 30, 2025—the company raised $7.7 million via equity sales to bolster its balance sheet. Strategic hires, including the appointment of a Chief Commercial Officer with data center expertise, and policy tailwinds for natural gas and biofuel solutions further support FCEL’s long-term positioning. While risks such as operational losses and production bottlenecks persist, the recent stock momentum suggests investor optimism about the company’s ability to execute on its strategic priorities.