What happened

Extending the rise that saw them climb 25% in June, shares of Plug Power (PLUG 1.26%) soared 26% in July, according to data provided by S&P Global Market Intelligence. 

Plug announced two supply deals and received favorable attention from Wall Street last month -- two factors that led investors to pick up shares of the hydrogen and fuel cell company.

So what

On July 11, Plug announced that it will supply two 5-megawatt (MW) electrolyzer systems for a green hydrogen production project in Tasmania, Australia. Combined, the two systems will produce 4,200 kilograms of hydrogen daily. Days later, Plug announced another supply deal. Characterizing it as "the largest announced project in the oil and gas sector in Europe," the deal will see Plug provide 100 MWs of electrolyzer systems that will produce about 43 tons of green hydrogen daily. 

The company didn't provide financial terms for either of the orders it received.

Plug is targeting 500 tons of daily green hydrogen production by the end of 2025.

Taking the position that shares of Plug have plenty of room to run, Abhishek Sinha, an analyst at Northland, upgraded the stock on July 14 to outperform from market perform and set a $22 price target. According to The Fly, Sinha predicated the outlook on the belief that Plug is on "a clear path to cash flow generation." Based on the stock's July 13 closing price of $12.36, Sinha's price target implied upside of 78%.

Another analyst, Kashy Harrison with Piper Sandler, also shared an optimistic outlook, raising the price target to $9 from $8. 

Now what

Through the first week of August, shares of Plug have given back some of the gains that they made in July. The company is scheduled to report second-quarter 2023 financial results on Wednesday. Should the company provide an unexpectedly strong financial report, it's quite possible that the stock will bounce back somewhat.

For those watching Plug's story play out from the sidelines, even if the company reports encouraging Q2 financial results, it's hardly a sign that the time is right to pick up shares. Unless investors have a high tolerance for risk and are comfortable with a highly speculative investment, the more prudent choice would be to continue keeping this stock at arm's length. Fortunately, for investors committed to gaining exposure to the hydrogen economy, there are plenty of other choices to consider.