Investors have been extremely pleased with the way the Nasdaq Composite (NASDAQINDEX:^IXIC) has moved higher recently, outpacing many other major market benchmarks. However, even the high-flying Nasdaq has to take a pause occasionally, and Wednesday morning was one of those occasions. Even as other indexes climbed, the Nasdaq was down 0.1% as of 11:30 a.m. EST.
The Nasdaq's malaise didn't stop stocks in some of the market's hottest sectors from continuing to climb. Among the most popular was FuelCell Energy (NASDAQ:FCEL), which could stand to benefit from recent legislation going through Washington. However, Nikola (NASDAQ:NKLA) got bad news that sent its stock falling even further, making remaining shareholders less confident about the electric truck specialist's future prospects.
FuelCell keeps gassing up
Shares of FuelCell Energy were higher by 15% on Wednesday morning. That brought the total gain for the stock to nearly 60% in just over a week's time.
FuelCell has benefited from a general interest in hydrogen fuel cell providers, but today's move came with a specific catalyst. The stimulus legislation that got passed by Congress earlier this week includes some provisions for businesses working on renewable energy and alternatives to fossil fuels. The provisions include some significant tax credit extensions for solar and wind projects, but there's also opportunity for fuel-cell providers to share in some of the tax breaks as well.
Fuel-cell technology has been under development for a long time, but the recent rise of the electric vehicle industry offers FuelCell Energy and other companies the opportunity to establish better use cases for their platforms. That in turn has led to greater interest from investors, who have been willing to provide financing for small companies like FuelCell as needed.
In the long run, FuelCell will have to start showing that its business can generate the revenue and profits that investors will want to see. That hasn't happened yet, and losses continue to mount. For now, though, FuelCell's stock is rising on hopes for the future.
Nikola faces another loss
Elsewhere, shares of Nikola were down another 10%, adding to their recent losses. The electric truck company found out that it won't be getting some business that many shareholders had hoped would go forward.
Nikola will end its collaboration with Republic Services (NYSE:RSG) on developing trucks for hauling refuse. The goal of the partnership had been to build a zero-emission battery-electric refuse truck that could become the state of the art. Eventually, Republic had hoped to purchase 2,500 trucks to add to its fleet.
However, both companies have now apparently reached the conclusion that development time for a EV trash hauler would be longer than expected, and cost overruns could result. The companies therefore ended the program early, and Republic has canceled its truck order.
Nikola still maintains that it intends to start delivering its Tre battery-electric semi-tractor trailer trucks in 2021, with plans to build out a commercial hydrogen station next year as well. Fuel-cell electric semis could come as early as 2023.
Shareholders, though, seem to be losing patience. Having enduring declines of 80% since June, it's easy to see why -- and harder to see how Nikola will return to its former glory.