Since the start of 2026, Plug Power (PLUG 9.78%) has rallied nearly 50%. But while this sharp surge may suggest the story with this renewable energy stock is changing, a closer look suggests otherwise.
There's a good reason that why while retailer investors have experienced renewed bullishness, the "smart money" has stayed on the short side, given the stock's nearly 25% short interest.
In the immediate term, Plug could stay on its current trajectory, as the widely followed hydrogen stock approaches $3 per share for the first time since last fall. However, in the months ahead, this stock could be at risk of a new round of turbulence. At least, assuming management fails to deliver yet again.
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Can Plug Power maintain momentum?
If you're familiar with Plug Power, you know full well this company's long history of share dilution. Just over the past five years alone, the share count has ballooned from just over 500 million to around 1.15 billion shares outstanding.
NASDAQ: PLUG
Key Data Points
Yet while it's fully fair to judge a company based on past actions, it's not as if Plug Power's days of covering high cash burn with equity raises are behind it. After all, at February's annual shareholder meeting, Plug Power investors voted in favor of a plan to double the company's maximum authorized shares, from 1.5 billion to 3 billion.
While you may think it's not likely that Plug Power will need to raise billions more, consider that last year, Plug Power reported a negative operating cash flow of $535.8 million. During the fourth quarter alone, the company reported a negative operating cash flow of nearly $150 million.
Fourth-quarter results were better than expected, and management also indicated higher sales and lower cash burn during 2026. The latest projections also call for the company to hit positive EBITDA in two years' time. However, along with share dilution, this company has a long track record of issuing ambitious growth targets, only to walk them back or fall short.
Why it's wise to stay skeptical
Don't get me wrong. I understand that Plug Power has adapted to a changing market through its "Project Quantum Leap" turnaround plan. This plan largely entails shifting focus toward more lucrative segments of the space, like electrolyzers and hydrogen fuel cells for forklifts and other material handling equipment.
While this did result in around 26.5% lower cash burn in 2025 compared to 2024, during Q4 2025, cash burn was up year over year. Only time will tell whether 2026 will bring narrower losses. If losses remain high, Plug Power may have to lean on more than asset sales to replenish its cash position, which stood at $368.5 million as of Dec. 31, 2025.
If management indicates the need to raise more capital through dilutive equity raises, it could trigger a sharp reversal in share prices. As this remains a serious risk, existing holders may want to bail now from this highly speculative growth stock.
