Hydrogen power is an interesting solution to the power problems created by artificial intelligence (AI). Hydrogen is the single most common element in the universe, and it can be extracted from seawater through a process called electrolysis.
When run through a hydrogen fuel cell, the element generates electricity and the only emission, if you can even call it that, is water. And one of the leading companies in the hydrogen space is PlugPower (PLUG +0.67%).
But is it the energy stock to add to your portfolio today?
Image source: Getty Images.
Real potential, or just hot air?
PlugPower is committed to building out the world's hydrogen infrastructure in the form of creating hydrogen fuel with electrolyzers, transporting that fuel, and generating electricity with it at hydrogen power plants.
In all, PlugPower has deployed 230 megawatts worth of its GenEco Electrolyzer across Europe, Australia, Canada, South America, and the United States. It also operates three hydrogen power plants in the U.S. with a fourth one planned.
The company supplies 45 tons of hydrogen daily to dozens of top companies like Amazon, The Home Depot, and General Motors.
And while the company is growing -- revenue was up 13% year over year for Q3 2025 (its most recent reported quarter) -- it's not growing fast enough to make up for its deep losses. For the first nine months of 2025, Plug Power's operating loss was $704.1 million.
PlugPower also holds $991.4 million in debt to $165.9 million in cash, which is less than ideal.
So, while hydrogen has potential, there's another energy source that's already generating vast amounts of carbon-free energy.
NASDAQ: PLUG
Key Data Points
The nuclear option
Nuclear power has seen serious interest from both the government and big tech companies as a promising option for AI's hunger for electricity.
That's why NextEra Energy (NEE +0.17%) is the far better way to play green energy.
NextEra doesn't solely generate green power, but it is a major nuclear plant operator and America's largest electric utility. It powers the homes of 12 million people across Florida.
It, along with another major nuclear plant operator, Constellation Energy, are working with big tech companies to bring nuclear plants back online to power AI data centers.
NextEra has partnered with Alphabet to resurrect Iowa's Duane Arnold nuclear power plant. Once the plant is operational (which NextEra projects for Q1 2029) Alphabet will purchase power from NextEra for the next quarter-century.
But even before that deal, NextEra was doing great. Net income for 2025 totaled $2.97 billion, up 29.4% over 2024 and earnings per share (EPS) for the year grew 28.5%. And the company is projecting an EPS compound annual growth rate (CAGR) of 8% through 2035.
NextEra's debt is $95.6 billion -- still rather high relative to its cash reserves of $2.8 billion but unlike Plug Power, it is profitable with a net margin of 19.4%. But the real reason you'd hold NextEra is its dividend, which it has raised for 31 years in a row.
At present it yields 2.4% and while its payout ratio is a little high at 70.3% it has been higher in the past while the company kept its dividend growth streak going. So I'm not particularly concerned about it.
So, while hydrogen has potential, nuclear seems to be the preferred option right now. Invest accordingly.
