Plug Power (PLUG 0.30%) stock is soaring once again. Since 2026 began, shares have risen in value by more than 40%. Over the past 12 months, Plug Power stock has more than tripled.
But here's the thing: Shares still trade at just $3 apiece. Over the past five years, however, shares have traded above $30 on three occasions. If shares did so once again, there would be nearly 1,000% in potential upside.
Before you jump into this promising hydrogen stock, there are two things you must understand.
NASDAQ: PLUG
Key Data Points
1. Don't expect shares to reach the $30 mark on a split-adjusted basis
Plug Power has been in business since 1997, formed as a joint venture between DTE Energy and Mechanical Technology Inc. In 1999, the company went public. Since the initial public offering (IPO), however, shares have fallen in value by more than 98%. The company did conduct a 1-for-10 reverse stock split in 2011. Otherwise, the prevailing stock price today would be somewhere around $0.30 -- below most exchange listing requirements.
Why has Plug Power stock performed so poorly? It isn't a problem with revenue. Sales have steadily grown in most years since 2000. The issue has been profitability. Only rarely has the company even posted a positive gross margin over its multidecade history. To cover its losses, Plug Power has been forced to rapidly sell more stock on a frequent basis, resulting in massive shareholder dilution. Since going public, Plug Power's share count has increased by an astounding 22,980%.
PLUG Revenue (TTM) data by YCharts
While hydrogen fuel is getting more attention in recent quarters due to the rising energy needs of artificial intelligence (AI) -- hence the large rebound in Plug Power's stock price -- most experts still agree that hydrogen fuel is years, if not decades, away from being economically viable versus conventional alternatives like fossil fuels and more common forms of renewable energy like wind and solar.
So, unless we get massive regulatory changes that make hydrogen fuel systems significantly more cost-competitive, I don't expect Plug Power to be able to achieve the scale necessary for sustained profitability. That means more and more share dilution will be on the way. Perhaps there will be a stock split that artificially pushes the share price above $30. But without pulling that lever, it will be very hard for Plug Power's underlying financial performance to outpace the expected scale of further stock issuances.
Image source: Getty Images.
2. Hydrogen stocks should only be held in a diversified basket
None of this means that investors shouldn't hold hydrogen stocks in their portfolios. It's just that these companies should be viewed as speculative investments within a broader, more diversified basket of either AI-related stocks or climate change bets.
No one knows exactly how AI will find the energy needed to sustain its $7 trillion global build-out of data centers. In the same vein, no one knows exactly what will happen to climate regulation, which could change the economic viability of alternative fuels at any moment. Hydrogen fuel systems like the ones Plug Power designs and manufactures may still have a place in the future. But hydrogen stocks are simply not something most investors should bet heavily on without diversification.
