In the relentless pursuit of green energy options, investors have contemplated placing their assets into hydrogen companies for over three decades. Hydrogen is seen as a potential candidate in the list of clean energy alternatives. Nevertheless, the sector presents several ongoing challenges.
Hydrogen production’s high costs, in comparison to traditional fossil fuels, are a significant factor to consider. Storage and distribution logistics, as well as public acceptance, also pose obstacles. While none of these challenges are insurmountable, investors who anticipated a quick transition to a hydrogen-based future have faced delays in realizing profits.
One can diversify their investments via numerous big energy companies that dabble in hydrogen. But for those craving that tantalizing, exponential 10x growth, the path leads to more affordable stocks, often penny stocks. If this is your investment trajectory, here are three hydrogen stocks for consideration.
“Before you invest a single dollar in Plug Power (NASDAQ:PLUG), be aware that 25% of shares were sold short as of the market close on June 11, 2024.” Plug Power is known for its involvement in the meme stock trend in 2021. Despite not returning to those previous heights, short sellers appear to remain dominant.
Recent developments include a 14% increase in PLUG’s stock within the last month, thanks to a conditional commitment from the U.S. Department of Energy potentially worth $1.66 billion. To better grasp this figure, it exceeds a year’s worth of current revenue. However, this deal faces scrutiny in Congress. In the case of leadership changes in Washington, the funding landscape for clean energy projects may shift.
While Plug Power is active on several projects and successfully generating revenue, it continues to bleed cash. Profit remains a seemingly distant future, leading analysts to maintain a Hold rating for PLUG stock.
Bloom Energy (NYSE:BE) takes a unique approach among hydrogen stocks due to its emphasis on stationary power systems. Their production is costly, but if successfully executed, could represent a 10x opportunity. A potential colossal market for these systems is in the several data centers located in Bloom Energy’s home state, California.
“Bloom also enjoys a partnership with Shell (NYSE:SHEL), as both companies explore opportunities for large-scale renewable hydrogen energy projects.”
Despite promising prospects, investors should note the nearly 17% short interest in BE stock. Institutional ownership makes up 71% of Bloom Energy’s stock, which could raise a red flag regarding the short interest. Nonetheless, it’s rare to find stocks offering a 10x return potential on a relatively small investment in this, or any sector. Now could be the opportune time to incrementally increase your stake.
Ballard Power Systems (NASDAQ:BDLP), renowned for a recent order of 70 hydrogen fuel cell engines from U.S. bus maker, Wrightbus, is also a hydrogen stock worth considering. Set to power buses in the United Kingdom and Germany, these engines are planned for delivery in 2024.
“Ballard is evolving as a leader in delivering hydrogen fuel cell solutions for heavy-duty mobility.” Their recent revenue report featured a noteworthy 22% year-on-year increase, raking in $10.6 million.
Ballard’s significant backlog in Europe may also prove advantageous, particularly considering the stricter regulatory environment and the threat to natural gas supplies caused by recent conflicts on the continent.
As we delve into these prospective investments, remember that the writer, Chris Markoch, holds no direct or indirect positions in these securities. His observations are solely his own and are offered purely for informational purposes.
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