Why Westport Fuel Systems Stock Jumped Over 40% Monday Morning

Amazon orders 1,000 natural gas engines to be supplied by a Westport Fuel Systems joint venture, a report says.

What happened

Shares of Westport Fuel Systems (WPRT -1.06%) soared Monday morning after a report by Reuters on Friday evening that Amazon (AMZN -0.16%) is ramping up orders for trucks and engines that run on natural gas.

Shares of clean fuel systems supplier Westport were trading 45% above Friday's closing price as of 10:50 a.m. EST Monday.

So what

Amazon has ordered more than 1,000 engines to be supplied by a joint venture between Westport and Cummins (CMI 0.86%), according to Reuters. The engines will run on renewable and non-renewable natural gas. Renewable natural gas (RNG) is made from methane derived from the breakdown of organic waste collected from farms, landfills, wastewater treatment plants, and the like.

Image source: Getty Images.

Now what

According to the report, Amazon has already ordered more than 700 class 6 and class 8 delivery trucks powered by compressed natural gas (CNG). "Amazon is excited about introducing new sustainable solutions for freight transportation and is working on testing a number of new vehicle types including electric, CNG and others," the company said in a statement reported by Reuters.

Westport offers a high pressure direct injection (HPDI) natural gas fuel system for heavy duty trucks. It formed the Cummins-Westport joint venture in 2001, and more than 80,000 Cummins-Westport engines are on the road, according to the company.

Amazon has said in its Climate Pledge agreement it plans to achieve net-zero carbon emissions by 2040. Westport shareholders today are cheering the inclusion of the company's technologies in those plans.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Howard Smith owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Cummins and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns

462%

S&P 500 Returns

125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2023.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Join Stock Advisor

Cumulative Growth of a $10,000 Investment in Stock Advisor

Calculated by Time-Weighted Return since 2002. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.