What happened

Nikola (NKLA -3.15%) shares popped nearly 7% Wednesday morning after an analyst gave several reasons to buy the stock. As of 11:15 a.m. ET, the stock was holding onto a gain of 5.4%. 

So what

Right now Nikola only sells battery-electric trucks. The company expects to sell between 300 and 500 of its Tre battery-powered semitrucks this year as it continues to ramp up production. It produced 50 vehicles in the second quarter. One analyst thinks what's coming next is the reason to buy Nikola stock.

row of Nikola battery electric trucks in manufacturing facility.

Image source: Nikola.

BTIG analyst Gregory Lewis upgraded the stock to a buy rating from a hold, saying the company's coming hydrogen fuel cell electric vehicles (FCEVs) could drive the stock higher. Lewis thinks shares are worth $12, a gain of about 140% from Tuesday's closing price of $5.03 per share. 

Now what

Lewis thinks the stock didn't get the boost it deserved from passage of the Inflation Reduction Act (IRA) and now high natural gas prices are another catalyst. The IRA includes subsidies for green hydrogen -- which must be produced with renewable sources -- that bring its cost in line with diesel fuel. That should help demand for Nikola FCEV trucks in the U.S. And that's not the only market Lewis thinks is primed for using hydrogen fuel cells.

In his research note shared by Barron's, Lewis wrote, "While hydrogen was always expected to be a long-term beneficiary of the ongoing energy transition, we expect concerns around energy security...and higher commodity prices...to help pull forward wider scale adoption of hydrogen in Europe and Asia."

After Nikola shares have plunged 46% year to date, investors are taking notice of the analyst's comments and bidding shares higher today. An investment in Nikola could be a good one from here, but it will require demand to grow for both battery and hydrogen-powered heavy trucks.