What happened

Fuel cell company Plug Power's (PLUG -3.38%) stock price continued to power higher on Tuesday, still coasting on the updraft that it got from peer Bloom Energy's (BE -3.54%) positive earnings report late last week -- and the big vote of confidence Bloom got from Bank of America Monday.

In fact, it looks like all of the major fuel cell stocks were rising Tuesday. As of 3 p.m. ET, Plug Power stock was up by 11%, Bloom was up by 13.2%, Ballard Power (BLDP -1.93%) had tacked on 10.2%, and FuelCell Energy (FCEL -1.61%) -- head and shoulders above the rest -- was sitting on an 18.4% gain.

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

Image source: Getty Images.

So what

Last week, as you'll recall, Bloom Energy delivered what Bank of America called "an uncharacteristically strong year-end financial performance," with fourth-quarter revenues rising 37% year over year, and a prediction of growth in the 30% to 35% range in 2022. Profitability, on the other hand, remained elusive. Its net losses actually grew by 27%.

Ignoring the deepening bottom-line issue, Bank of America's analyst predicted that Bloom would deliver "a series of favorable updates headings into FY22," and investors on Tuesday seemed to be extrapolating from this that the news will be similarly good for Bloom Energy's peers: Plug, Ballard, and FuelCell Energy.

Now what

I remain unconvinced. On the one hand, yes, Bloom Energy has made progress on growing sales, and its net losses over the past couple of years were less steep than they were previously. On the other hand, they're still losses, not profits, and free cash flow at the company looks as dismal as ever, with more than $110 million in cash burned in 2021.

None of the other fuel cell companies looks much better, by the way. In their most recently reported quarters, GAAP losses were still rising at Plug, Ballard, and FuelCell, according to data from S&P Global Market Intelligence, and they all had negative free cash flow to boot. To top it all off, on Tuesday morning, the news website Electrek, which focuses on the electric vehicle and green energy sectors, reported on the results of a study that it says "confirms what common sense has made clear for years: Hydrogen fuel cells cannot catch up to battery-electric vehicles."  

According to the study, published in the highly regarded scientific journal Nature, fuel cell vehicles are three times less efficient than battery-electric vehicles such as Tesla produces. Furthermore, pure EVs benefit from "the great advantage of [being able] to build on an already extensive electric grid infrastructure with virtually every electric outlet in the world being a potential charging station," whereas fuel cell vehicles will require an entire new refueling infrastructure to be built to become viable.  

In Electrek's view, "for passenger cars, it is already game over for fuel cells." The investors who are buying heavily into Bloom Energy, Plug Power, Ballard Power, and FuelCell Energy stocks Tuesday, unfortunately, seem to have not yet gotten the memo.