What happened

Fuel cell stocks rocketed on Monday after the House of Representatives finally passed a landmark $1.2 trillion infrastructure bill, paving the way for long-awaited federal spending on America's infrastructure, including big investments in clean energy. As of 11:25 a.m. EST Monday, here's how much the leading fuel cell stocks had rallied:

  • Plug Power (PLUG -0.40%): up 8.5%.
  • Bloom Energy (BE 6.04%): up 15%.
  • FuelCell Energy (FCEL -0.02%): up 20%.

So what

The bill that passed Nov. 5 calls for investments across the infrastructure sector, including $7.5 billion on zero- and low-emission buses and ferries and another $7.5 billion on electric-vehicle charging infrastructure.

Hydrogen fuel cell technology is getting a lot of attention lately from clean energy enthusiasts. California, for example, sees hydrogen fuel-cell electric vehicles as critical to achieving its goals of 1.5 million zero-emission vehicles by 2025.

Although neither Plug Power, Bloom Energy, nor FuelCell Energy directly supplies the EV industry, each is striving to carve a niche within the clean energy space.

Hydrogen fuel cell buses.

Image source: Getty Images.

Bloom Energy, for example, builds energy servers that provide uninterrupted renewable power supply through solid-oxide fuel cells that convert natural gas and hydrogen into electricity. Some of the largest global companies already use Bloom Energy's servers.

The jump in Bloom Energy shares today, in fact, is a carryover from last week when shares popped after the company reported record acceptances -- or the volume of servers installed during a given period -- of 353 systems in the third quarter. Bloom Energy recently struck a massive four-year contract worth $4.5 billion in revenue from South Korea that sent the stock skyrocketing, and announced its first dairy farm biogas project that converts cow waste into renewable electricity today.

FuelCell Energy, on the other hand, primarily builds fuel-cell power plants and recently reported strong growth in revenue for its third quarter. The company, though, doesn't have a product backlog, derives revenue from services as of now, and has been raising cash mainly from share sales. These are just some of the reasons why FuelCell Energy shares have underperformed peers in recent months. And that, ironically, might also explain why FuelCell Energy stock jumped the most today -- it seems to be playing catch-up to rivals as investors believe any and all companies in clean energy could benefit under the Biden administration.

PLUG Chart

PLUG data by YCharts

So far, Plug Power has been the top performer thanks to multiple deals and aggressive efforts to expand its hydrogen footprint. Examples include collaborations with energy and aerospace giants, a partnership to build an electrolyzer gigafactory in Australia, an alliance with a drone maker in Israel, and a project to build the largest green hydrogen plant on the West Coast in California.

These deals also reflect the company's efforts to expand its end-user market base beyond niche market, fuel-cell forklifts. Just last Thursday, SMBC Nikko analyst David Havens initiated coverage on Plug Power stock with a price target of $50 a share, citing long-term opportunities for hydrogen fuel cells in multiple areas, including transportation, power generation, heavy- and medium-duty motive applications, backup power, and distributed power.

Now what

With these fuel cell stocks making massive moves already, the onus will now lie on Plug Power, Bloom Energy, and FuelCell Energy to show tangible growth to sustain momentum in their stock prices.

Meanwhile, all eyes will be on Plug Power as it reports its third-quarter numbers tomorrow, Nov. 9. Plug Power recently called for sales, or gross billings, worth $825 million to $850 million in 2022 and $3 billion in 2025. By my calculation, its gross billings could grow almost 50% and cross $500 million in 2021. If the company guides anywhere even close tomorrow, the stock could jolt even higher.