Daily Options Income Strategy | BE Earnings Imminent! Can the AI Power Demand Growth Narrative Pass a Critical Test?

I. Market Barometer

On the previous trading day, the three major U.S. indices were mixed, but the fuel cell sector faced heavy selling pressure. $Bloom Energy (BE.US)$ plummeted 15% amid a wave of AI power-related position unwinding, wiping out over $6 billion in market capitalization in a single day, with other stocks in the sector also... $FuelCell Energy (FCEL.US)$ dropped 9%, $Plug Power (PLUG.US)$ and others fell more than 4%, indicating this sell-off was driven by profit-taking in high-beta names across the sector rather than deterioration in individual company fundamentals. $Bloom Energy (BE.US)$ will release its Q2 earnings after market close on July 28; elevated implied volatility (IV) has created a premium window for options sellers.

II. Watchlist Highlights

BE: Plunges ahead of Q2 earnings, breaking below $200—was it unfairly sold off due to AI power exposure?

$Bloom Energy (BE.US)$ Closed Friday at $184.89, down sharply by 14.91% for the day, with an intraday high of $214.19 and a low of $183.22. Trading volume reached $3.105 billion, with a volume ratio of 1.16, clearly indicating heavy selling on elevated volume.

The current technical setup is in an oversold, sharp-decline phase.The stock price has broken through multiple technical support levels, nearly halving from its 52-week high and also falling below the previous key psychological level of $200. Looking at its prior trend, BE surged more than 50% after its April earnings report, peaked at $351 in mid-June, and has since been in a continuous downtrend. It has now completely given back all gains made after the Q1 earnings release and is essentially back to its pre-April earnings price level. The RSI has dropped to an extremely low level, signaling strong oversold conditions.

The root cause of this sell-off is sector-wide AI power trading liquidations, not a change in BE’s fundamentals.A short-seller report targeting BE’s supply chain and capacity in early July provided a narrative foundation for bears, but there was no new negative news on the day.

$Bloom Energy (BE.US)$Q2 earnings will be released after market close on July 28.Institutions expect Q2 2026 revenue of $827 million, up 106.11% year-over-year; and EPS of $0.251, marking a return to profitability from a prior-year loss. The above figures are based on US-GAAP accounting standards.

The market will focus on whether core financial metrics can sustain the momentum of Q1’s upside surprise.The company delivered an impressive Q1 performance with $751 million in revenue (up 130% YoY) and $72.2 million in operating profit, and raised its full-year revenue guidance to $3.4–3.8 billion (an 80% YoY increase), with non-GAAP operating profit guidance of $600–750 million (up 207% YoY).

Therefore, it is critical whether Q2 results can maintain this strong momentum. The market will watch closely whether management, buoyed by robust AI power demand, raises full-year revenue guidance again—especially considering its partnership with Brookfield has now expanded to $25 billion.

The company’s backlog is a key metric for assessing future revenue visibility and a focal point of contention between bulls and bears.The company disclosed a total backlog of approximately $20 billion, including $14 billion in service contract backlog and roughly $6 billion in product backlog. These long-duration contracts (service agreements spanning 10–15 years) provide high revenue visibility.

Short sellers question the significant gap between unaudited backlog figures and legally binding remaining performance obligations. Thus, the market will closely monitor how much of the reported backlog has been converted into binding contracts and the execution progress of customer agreements.

Technological competitiveness and supply chain security are key determinants of a company's long-term value.Management previously announced that all newly shipped energy servers will fully support an 800V DC architecture, helping data center customers reduce power conversion losses, improve efficiency by 10%–20%, and shorten delivery lead times. The market hopes to see this technological advantage translate into more orders and customer recognition.

Short-seller Hunterbrook previously alleged that the company relies on Chinese suppliers for the critical rare earth element scandium and questioned whether its production capacity targets are achievable.Although the company has denied these claims, the market will look for further evidence of supply chain diversification in this earnings report.

In summary, the key focus of this BE earnings report is the critical validation point—shifting from storytelling to hard data. The market will closely watch revenue growth, conversion of backlog orders, and business guidance to assess whether the $20 billion order backlog and the AI power demand narrative can justify the company’s business value and current valuation.

3. Options Premium Collection Strategy

Options market pricing suggests the stock could experience significant post-earnings volatility of approximately 26%. Volatility during the earnings window may be further amplified. Investors are advised to manage risk carefully, avoid selling more options than they can comfortably cover, and select options with higher levels of out-of-the-moneyness when writing options.

1. Cash Secured Put

Sell 1 contract of $Bloom Energy (BE.US)$ 260731 120P, estimated required margin (for reference only): $12,000 ($120 × 100)

Opportunity Thesis：
For investors who believe in the long-term logic of on-site AI power generation but have not yet established positions, the current $Bloom Energy (BE.US)$ has already retreated to pre-Q1 earnings levels amid sector-wide sell-offs, with fundamentals unchanged by the sector-wide unwinding.

However, entering directly ahead of earnings faces high uncertainty. By selling put options, if the stock price stabilizes near current levels or experiences a corrective rebound, investors can collect premium income benefiting from the elevated implied volatility (IV). If the stock declines toward around $120, they may also have the opportunity to establish a position at a more attractive cost basis.

2. Covered Call

Hold 100 shares of BE and sell 1 contract of $Bloom Energy (BE.US)$ NEBIUS 260821 350C

Opportunity Rationale：

For investors already holding BE, the stock price has already retreated to multi-month lows in the short term. Although Q2 earnings expectations are strong, post-earnings volatility could be significant.

If investors are bullish on the company's long-term prospects for AI-powered on-site power generation but concerned that short-term market sentiment may continue to weigh on the share price, they can sell call options.

If the stock trades sideways near current levels, option premium income can gradually lower the cost basis of the position. If the Q2 earnings beat expectations or full-year guidance is raised again—driving a rebound—the investor effectively locks in profits at a key resistance level.

IV. Risk Management Advisory

Although seller strategies have a high win rate, investors must still implement proper risk management:

– Position management is everything.: The biggest risk for option sellers lies in black swan events. It is recommended that margin allocated to any single underlying should not exceed 20% of total capital. Never sell options beyond your capacity to absorb losses just for the sake of collecting higher premiums.

– Covered Call and Timely Rolling: When a covered call becomes deeply in-the-money (i.e., the stock price far exceeds the strike price), if you remain bullish on the underlying stock, you should decisively 'roll' the position—buy to close the current option and simultaneously sell a longer-dated call with a higher strike price—to avoid having your shares called away at an unattractive price.

– Cash-secured put options: Beware of 'left-tail risk': For cash-secured puts, if the stock price crashes due to fundamental deterioration (rather than a normal pullback), don’t hold on stubbornly. In such cases, exit with a stop-loss or roll the position down to buy time while waiting for volatility to normalize.

Make good use of the Options Seller Hub to understand income strategies for selling options and earnOption premiums！

Options Risk Disclosure

An option is a contract that gives the holder the right—but not the obligation—to buy or sell an underlying asset at a predetermined price on or before a specified date. Option prices are influenced by multiple factors, including the current price of the underlying asset, the strike price, time to expiration, and implied volatility. Implied volatility reflects the market's expectation of future volatility over the life of the option and is derived by back-solving from the Black-Scholes option pricing model. It is commonly viewed as an indicator of market sentiment. When investors anticipate higher volatility, they may be willing to pay more for options to hedge their risk, leading to higher implied volatility. Traders and investors use implied volatility to assess the attractiveness of option prices, identify potential mispricings, and manage risk exposure.

Disclaimer

This content does not constitute an offer, solicitation, recommendation, advice, opinion, or any guarantee regarding any securities, financial products, or instruments. The risk of loss in trading options can be substantial. In certain circumstances, your losses may exceed the initial margin deposit. Even if you place contingent orders, such as 'stop-loss' or 'limit' orders, there is no guarantee they will prevent losses. Market conditions may render such orders unexecutable. You may be required to deposit additional margin on short notice. If you fail to meet the required margin within the specified timeframe, your open positions may be liquidated. Nevertheless, you remain fully responsible for any resulting deficit in your account. Therefore, prior to trading options, you should thoroughly study and understand options and carefully consider whether such trading aligns with your financial situation and investment objectives. If you trade options, you should become familiar with the procedures for exercising options and handling expiration, as well as your rights and obligations upon exercise or expiration. Options trading involves substantial risk and is not suitable for all investors. Investors should carefully read 'Characteristics and Risks of Standardized Options' before engaging in any options trading strategy.

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