Plug Power (PLUG 1.01%) is a key player in the hydrogen fuel cell market, and the company proudly proclaims that it's "leading the green hydrogen revolution." But with mainstream adoption of green hydrogen likely a decade or two away, Plug Power seems like the belle of a ball that hasn't happened yet.
Unfortunately, Plug Power has been a wretched investment. Since debuting as a publicly traded company in 1999, Plug Power stock has plummeted 99%. Plug's operational losses have been persistent, and the company frequently issues new shares of common stock just to keep the lights on.
Management recently announced plans to pursue more business with data centers. Could a pivot to the booming artificial intelligence (AI) infrastructure market reverse Plug Power's fortunes and revive the stock?
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Plug has a viable solution for backup electricity
Earlier this month, Plug Power said it signed a nonbinding letter of intent to sell its electricity rights in New York and another location to energy-starved AI data centers. The deal is expected to generate over $275 million in badly needed liquidity for Plug, which lost $364 million in its third quarter.
Also, the company is working with a developer to explore opportunities for Plug to supply backup electricity to U.S. data centers via its hydrogen fuel cell generators. At the same time, it's halting work on multiple clean hydrogen projects that were supposed to be funded by a $1.7 billion loan from the Department of Energy that the Trump administration recently canceled.
NASDAQ: PLUG
Key Data Points
In my opinion, this move makes a ton of sense for Plug Power. Over the next decade, data center electricity demand is projected to skyrocket beyond what the existing power grid can supply. Plug's zero-emission fuel cell systems could be a strong fit for data centers and other facilities that require always-on electricity, with the added benefit of being more environmentally friendly than traditional combustion generators. However, it's way too early to tell if this will be enough to turn things around for Plug Power or its stock. I would stay away for now.
