What happened
Shares of growth and technology companies are leading the market higher today, but alternative energy company Plug Power (PLUG -2.58%) was outpacing even the tech-heavy Nasdaq Composite index. While the Nasdaq was up by 1.1% as of 12:45 p.m. ET, Plug Power stock was higher by 6% at that time.
So what
Investors have been feeling better about growth stocks over the past few days as they anticipate inflation data to keep heading in the right direction, which could mean the Federal Reserve will slow interest rate hikes.
The outsized gain in Plug shares today comes from another tailwind, too, however. The company just announced a deal to sell its equipment to a competitor in Canada. Supporting a competitor might not sound like a good business decision, but it most certainly is in the best interests of Plug Power, too.
Image source: Getty Images.
Now what
Plug management has said it expects to generate revenue of about $1.4 billion in 2023, representing about 65% year-over-year growth. But it expects that to soar to $5 billion just by 2026. A large part of that anticipated growth is expected to come from growing demand for green hydrogen. Plug has been investing in facilities across the U.S. to increase its future hydrogen production capacity.
The new order for two hydrogen liquefiers is for Canadian energy company TC Energy. These systems will have the capacity to produce hydrogen at a rate of 30 tons per day (TPD). But it makes sense for Plug Power to help other energy companies meet their hydrogen generation goals.
Adding capacity to support a transition to hydrogen use as a fuel is what will ultimately help Plug Power succeed. Another step toward more infrastructure to support a hydrogen economy is what investors are seeing in this deal today.
