After a 24% drop in August, Plug-in power supply (NASDAQ: PLUG) Stocks are soaring, having just posted some solid weekly gains. At the high of trading this week through Friday at 9:40 a.m. ET, the stock was up 25.5%, according to data from S&P Global Market Intelligence.
The green hydrogen industry is still in its infancy, but more and more companies and economies are recognizing the potential of green hydrogen to tackle the climate change crisis. This week we saw a number of notable developments in the industry that are fueling investor hopes for Plug Power.
Green hydrogen gets attention
Australia has just unveiled a new national hydrogen strategy with government incentives of more than $5 billion as the country aims to become a “global hydrogen leader.” India, meanwhile, has announced its mission to become a global hub for the “production, use and export of green hydrogen.” Just days ago, the auto giant BMW announced plans to launch its first-ever hydrogen fuel cell electric vehicle in 2028 in partnership with Toyota engine.
Closer to home, the Department of Energy (DOE) this week issued a notice of interest to fund hydrogen production, infrastructure and fuel cells in the U.S. A few weeks ago, the DOE doled out $62 million in funding to 62 projects. Plug Power received a $10 million grant for a hydrogen fueling station.
This week, Plug Power also signed its first contract for the Technical Evaluation Phase (TEP). Plug Power will provide technical support to H2Driven in Portugal for 25 megawatts of electrolyzers for a green methanol project.
Is it time to buy Plug Power stock?
Plug Power is one of the world’s largest green hydrogen companies and aims for $20 billion in annual revenue and a gross margin of more than 35% by 2030. That seems like a lofty goal, however, considering Plug Power expects to generate just $825 million to $925 million in revenue this year, down from $891 million in 2023.
An even bigger problem is money, and Plug Power is counting on a $1.66 billion loan from the DOE to build hydrogen plants. If it doesn’t secure the loan, Plug Power could soon run out of money to survive. Any rebound in Plug Power stock could therefore just be a dead cat bounce. Beware.
Should You Invest $1,000 in Plug Power Now?
Before you buy Plug Power stock, you should consider the following:
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Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool recommends Bayerische Motoren Werke Aktiengesellschaft. The Motley Fool has a disclosure policy.
Why Plug Power Shares Soared Over 25% This Week was originally published by The Motley Fool
