Benefits and risks of investing in hydrogen stocks
Some benefits of investing in hydrogen stocks include:
- Growth potential: According to a Deloitte forecast, hydrogen could become a $1.4 trillion global market by 2050.
- Cleaner: Hydrogen is a cleaner fuel than oil and natural gas, so investing in the sector can help protect the environment.
- Income potential: Some hydrogen stocks pay dividends, enabling you to generate some passive income.
Meanwhile, some risks of investing in hydrogen stocks include:
- Market challenges: The hydrogen market is highly volatile, driven by price fluctuations and shifting government policies. These and other issues have caused some hydrogen companies to cancel major expansion projects.
- Higher-risk companies: Many hydrogen companies have higher risk profiles due to money-losing operations and weaker balance sheets.
- Limited direct investment options: There are only a few pure-play hydrogen companies and one hydrogen ETF, limiting investment options for investors.
Methodology: How these stocks were chosen
I selected nine publicly traded companies with some direct exposure to the emerging hydrogen industry through either production, electrolyzers, fuel cells, or distribution. The list pairs diversified industrial companies with smaller pure plays to balance risk. I favored companies with recent, verifiable hydrogen developments in 2025, such as new contracts, project milestones, or hydrogen-related earnings. They represent some of the best ways to gain exposure to the hydrogen industry.
Should you invest in hydrogen stocks?
Hydrogen has enormous long-term potential, helping decarbonize heavy industry, replace natural gas in some applications, and store renewable energy. If the technology scales, it could support a multitrillion-dollar global market.
At the same time, hydrogen is still in its early stages of commercial development. Clean hydrogen remains expensive to produce, and wider adoption depends on cost reductions, infrastructure build-out, and ongoing policy support, all of which can change over time.
Because of that uncertainty, hydrogen stocks tend to carry higher risk profiles. Many pure-play companies are unprofitable, while larger firms involved in hydrogen generate most of their revenue elsewhere. For investors, that means hydrogen may be better approached cautiously, either as a small thematic allocation, a basket of companies with different risk profiles, or through a hydrogen ETF.
