What: Shares of Plug Power Inc (NASDAQ:PLUG) have surged as much as 23% today on speculation that another big customer could add hundreds of millions in backlog for the company.

So what: On Friday, CEO Andy Marsh was at the opening of a new distribution facility for Home Depot that will include 172 Plug Power GenDrive fuel cells and fueling infrastructure. That led Matt Margolis at Seeking Alpha to speculate that Home Depot alone could add $1 billion in revenue for Plug Power if it converted 100 distribution facilities to hydrogen power.  

This kind of speculation has been around with Plug Power for two years now, and it's a chase investors shouldn't make. Below is the chart of the stock's performance since the day before Plug Power announced that Wal-Mart was buying over 1,700 units from the company, bringing speculation that the world's largest retailer could switch to hydrogen-powered forklifts. You can see that buying on that news and growth speculation hasn't worked out well for investors.  

PLUG Chart

PLUG data by YCharts.

Now what: The challenge for Plug Power is that the company hasn't been able to turn orders into profit and hasn't built a strong competitive moat around its product. Remember that GenDrive is essentially retrofit into existing manufacturers' products, so Plug Power could easily be shut out of the industry's growth potential if manufacturers like Raymond decide to make a hydrogen product themselves.

Building a model that shows billions in potential revenue is great, but Plug Power hasn't shown the ability to make money and doesn't have a product with a competitive advantage in the market. So, I can't see buying today's speculation, even if it's a nice-sounding story for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.