Why ChargePoint, QuantumScape, and Bloom Energy Rose Early Today

What happened

Investors seem to be looking to reverse a recent trend on the first day of November trading. Technology and higher-risk stocks badly trailed the more more blue chip-oriented Dow Jones Industrial Average in October. But this morning, more speculative stocks like ChargePoint Holdings (CHPT 0.36%), QuantumScape (QS 0.48%), and hydrogen fuel cell maker Bloom Energy (BE -1.26%) were on the rise. The stocks gave back early gains of between 4.4% and 5.4%, though. As of 12:30 p.m. ET. ChargePoint shares remained up 0.5%, QuantumScape was at about breakeven, but Bloom Energy was down 0.8% at that time. 

So what

The Dow Jones soared almost 14% in October, marking its best month since 1976. That was in stark contrast to the tech-heavy Nasdaq Composite that moved up about 4%. Investors seemed to want to take advantage of that discrepancy this morning, sending riskier growth stocks higher. QuantumScape updated investors with its third-quarter report last week, but ChargePoint and Bloom Energy have yet to do that. So there hasn’t been any material news from these companies to explain today’s outperformance. 

Now what

All three of these names underperformed the Nasdaq last month. Even with a spike after its earnings report, QuantumScape still lost over 1%, while ChargePoint and Bloom Energy were down between about 5% and 7%. QuantumScape’s pop didn’t hold, but investors seemed to be happy the company is managing spending and now plans to end the year with lower capital expenditures than originally expected. That will result in liquidity of more than $1 billion, compared to the prior projection of $950 million. 

ChargePoint won’t report its latest quarterly results until later this month at the earliest since its fiscal quarter just ended yesterday. But after its second-quarter update, the company reiterated that it expects its full fiscal year revenue to approximately double from last year. ChargePoint still won’t be profitable, however. It lost more than $90 million in the second quarter on sales of $108.3 million. 

Bloom Energy may be the closest of these names to profitability. It still reported a loss in its second quarter on record revenue, though. It expects positive cash flow from operations for the full year, however, and reports its third quarter later this week.

Investors in these stocks should know they are all very speculative. While the electric vehicle and alternative energy sectors look to have bright futures, not every company in the sectors will ultimately be successful investments. Investors should allocate funds accordingly. But with these stocks underperforming the major indexes last month, some may have felt now was a good time to risk some capital. 

Howard Smith has positions in Bloom Energy Corp, ChargePoint Holdings Inc., and QuantumScape Corporation. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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