What happened
The stocks of several companies moving forward with hydrogen fuel cell development are having a good week, even with the overall markets in a bit of a downturn. The two things may, in fact, be related. Shares of Plug Power (PLUG -0.73%), Bloom Energy (BE -0.51%), and FuelCell Energy (FCEL -6.93%) have all jumped this week. These names were up as much as between 8% and 14% at their highs during the period. As of late trading on Friday, the weekly moves for these names were as follows:
- Plug Power was up 4.1%;
- Bloom Energy gained 9.8%; and
- FuelCell Energy rose 8.6%.
So what
Investor enthusiasm for these names, and others, in the alternative energy sector began with some positive earnings news last week. Bloom Energy reported its fourth-quarter and full-year financial results last Friday. Investors and some analysts thought the results were a sign the company was on the right path. The fuel cell company told investors it expects to generate positive cash flow from operations in 2022. It also raised its long-term, 10-year revenue growth guidance by 500 basis points to an annualized range of 30% to 35%.
Image source: Getty Images.
But the positive move in these stocks may be related to a more general trend, too. With geopolitical risks including a possible Russian invasion of Ukraine headlining the news all week long, the prices of oil and natural gas have been on the rise. That's usually a catalyst for alternative energy stocks like Plug, Bloom, and FuelCell Energy. It's also what has helped trigger some selling in the overall financial markets this week.
Now what
It also helps that these companies continue to focus on growing the hydrogen economy. Plug Power announced this week that it has begun a new collaboration agreement with two other hydrogen fuel technology companies to jointly develop hydrogen liquefaction plants.
The agreement follows a recently announced acquisition by Plug for Joule Processing. Joule is an engineered equipment provider that will help with the new plan for hydrogen liquefiers. Plug said in a statement, "The proven cryogenic process technology that Joule developed for the gas processing industry is directly applicable to hydrogen liquefaction and has the potential to reduce the cost of liquified hydrogen by 25%."
Investors haven't yet heard from Plug Power on its fourth-quarter results, but FuelCell Energy will be holding an Investor Day update on March 16. If it sounds as optimistic as Bloom Energy, it could provide another boost for stocks in the sector. Besides the longer-term optimism from Bloom, the company also increased its near-term guidance by 10%. It now sees 2022 revenue of at least $1.1 billion.
The company-specific details are what will ultimately drive the movement in these stocks. But in the shorter term, any global risks or uncertainties related to energy supply could rattle investors in the sector, too. It remains to be seen if the moves in the stocks this week were from the former or the latter.
