Please ensure Javascript is enabled for purposes of website accessibility

Why Plug Power Stock Just Popped Again

By Rich Smith - Updated Apr 23, 2021 at 12:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is the hydrogen revolution finally here? (And if not, how long will it take?)

What happened

Shares of rising hydrogen fuel cell stock Plug Power (PLUG 2.44%) is rocking Friday afternoon, up 3.5% as of 12:50 p.m. EDT. And Plug peers FuelCell Energy (FCEL 1.59%) and Ballard Power Systems (BLDP 0.31%) are coming along for the ride, rising 4.6% and 5.7%, respectively.

If you own any of the big fuel cell names, you can send your thank-you notes to Investor's Business Daily

Cartoon fuel cell car on palm of hand putting out H2 bubbles as exhaust

Image source: Getty Images.

So what

In a report this morning, momentum stock-trader guide IBD declared that hydrogen fuel cells "may be near a big breakthrough," citing an announcement from Chevron and Toyota on Wednesday that the companies have formed a "strategic alliance" to "build out hydrogen fuel cell infrastructure."

In addition, IBD noted that governments appear to be "getting behind [hydrogen fuel cells] at a national level," a trend that would obviously be good news for Plug, which produces hydrogen gas for fuel and manufactures the fuel cells that convert that fuel into electricity. In a perfect scenario in which everything goes right, and hydrogen costs fall below $2 per kilogram, IBD says hydrogen could supply as much as "25% of the world's energy by 2050."  

Now what

IBD notes that "gray hydrogen," produced from natural gas (and thus a greenhouse gas contributor) already costs about $2 per kilogram. The real key to Plug (and its peers) running away with the energy market, however, is getting the cost of green hydrogen (produced by using electricity from wind and solar power to split off hydrogen atoms from water via electrolysis) down below $2 a kilogram.

Currently, green hydrogen costs about $5 or $6 per kilogram to produce, says IBD, but it's already halved from where it once was, and IHS Market predicts that the current price will continue to fall, hitting perhaps $4 by 2025. Thus, the real question for determining Plug's long-term success may be: Can the price of green hydrogen drop another 50% from there? (And if so, how long will that take?)

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
$17.60 (2.44%) $0.42
Toyota Motor Corporation Stock Quote
Toyota Motor Corporation
$154.67 (-0.52%) $0.80
Chevron Corporation Stock Quote
Chevron Corporation
$142.66 (-2.63%) $-3.85
FuelCell Energy, Inc. Stock Quote
FuelCell Energy, Inc.
$3.84 (1.59%) $0.06
Ballard Power Systems Inc. Stock Quote
Ballard Power Systems Inc.
$6.43 (0.31%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

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

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/06/2022.

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

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.