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Why Plug Power, Bloom Energy, and FuelCell Energy Stocks Rallied Today

By Neha Chamaria – Aug 10, 2021 at 3:15PM

Key Points

  • The Senate passed a $1 trillion infrastructure bill on August 10.
  • The bill proposes substantial investments into clean energy, including hydrogen.
  • Fuel-cell stocks like Plug Power are already expanding capacity aggressively to meet higher demand.

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Plug Power hints at rising demand for hydrogen fuel cells even as a bipartisan infrastructure plan is passed.

What happened

Fuel-cell stocks are flying higher today, building upon the momentum they've carried so far this month. This morning, Plug Power (PLUG 0.38%), Bloom Energy (BE 2.14%), and FuelCell Energy (FCEL 3.68%) surged within minutes of the market's opening, gaining at least 5% each, with FuelCell energy shares even crossing the 10% mark.

The stocks cooled off a bit as the day progressed but were still trading up as of 12:26 p.m. EDT. Plug Power and FuelCell Energy were up 4.7% and 5.7%, respectively, while Bloom Energy was up about 1% at that point in time.

This morning, Plug Power announced the start of construction at a hydrogen plant. That may not sound like a big deal, but with management stressing how the new plant is entirely a "result of increasing demand," investors in other hydrogen fuel-cell stocks took a cue and sent the shares higher. With the Senate also finally passing a $1 trillion infrastructure bill on August 10, investors in clean energy had a lot to be excited about.

So what

Plug Power is investing $84 million on a new plant in Georgia, which is expected to produce 15 tons of liquid green hydrogen per day using 100% renewable energy. It should be complete by the end of this year. Chief Strategy Officer Sanjay Shrestha elaborated:

Plug Power's newest production plant is a result of increasing customer demand. More and more, customers are expressing their commitment to green hydrogen solutions. This Georgia plant is an important step for developing North America's first force-majeure resilient green hydrogen supply network. This helps Plug Power, our customers and, more importantly, the broader hydrogen economy.

Hydrogen fuel cell buses.

Image source: Getty Images.

Plug Power is targeting production of 500 tons of hydrogen per day by 2025, which is why it has announced three plants just this year. It includes one in New York, which is also touted to be North America's largest green hydrogen facility.

Just days ago, Plug Power delivered record second-quarter numbers including 83% growth in year-over-year revenue. Importantly, the company raised its full-year estimates for gross billings to $500 million, representing 50% growth over 2020.

Bloom Energy reported a record second quarter, as well, with revenue growing 21.6% year over year. FuelCell Energy was an outlier as it reported a decline in its second-quarter revenue, but the company is increasing its production rate to meet higher demand.

FuelCell Energy shares rocketed on August 9 after the company secured $15 million in funding to finance a fuel-cell project that it considers a "milestone" project. With Plug Power emphasizing the rise in demand for fuel cells today, FuelCell Energy shares continue to rise.

Now what

With the world slowly but gradually transitioning to clean energy, hydrogen fuel cell technology has tremendous potential. Most research firms predict the fuel-cell market will grow at double-digit compound annual rates in the coming years. With President Joe Biden's comprehensive infrastructure bill also proposing significant investments into clean energy, including hydrogen, and inching closer to being signed into law, investor interest in fuel-cell stocks is bound to remain high.

Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Plug Power Stock Quote
Plug Power
$15.81 (0.38%) $0.06
FuelCell Energy Stock Quote
FuelCell Energy
$3.66 (3.68%) $0.13
Bloom Energy Corp Stock Quote
Bloom Energy Corp
$21.98 (2.14%) $0.46

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

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