The One Hydrogen Fuel Cell Stock To Rule Them All

If you are looking to get into the hydrogen fuel cell market there is really only one choice for serious investors. While Nikola (NASDAQ: NKLA) is engaged in fuel cell technology it has too many irons in the fire and other, more focused companies like FuelCell Energy (NASDAQ: FCEL) and Ballard Power System (NASDAQ: BLDP), are too focused and not producing the kind of results that inspire a sustainable increase in share prices. No, if you are looking to get into the hydrogen fuel market the only real choice is Plug Power (NASDAQ: PLUG) because it is giving the market what it wants, end-to-end solutions for stationary and mobile hydrogen energy production. 

Plug Power Inks Game-Changing Deal With Amazon

Plug Power recently announced a game-changing deal with Amazon that has the company well on track to hit its $3 billion in annual revenue target by 2025. Amazon has agreed to begin buying its liquid hydrogen from PlugPower beginning in 2025 and is expected to purchase at least 10,950 tons annually. This is on top of the ongoing process to upgrade Amazon’s warehouse fleet to hydrogen fuel cells, an endeavor that has so far resulted in 15,000 fuel cell installations across 70 distribution centers nationwide. 

Plug Power already has a deal with another of its core clients, Walmart, to deliver 20 tons per day. Walmart uses the fuel to power its forklifts and material handling trucks across its warehouses and distribution centers. Walmart embraced Plug Power fuel cells more than ten years ago and recently expanded its hydrogen-powered fleet to over 9,000 vehicles and counting. 

Other recent news for the company includes a deal to build a plant at the EU's largest port facility. Located in Antwerp, the company will erect a 100-megawatt green hydrogen plant that is expected to go into production by 2024. The plant will make up to 12,5000 tons of hydrogen per year for the EU market and should put the company well over its goal of $3 billion in annual revenue, a 200%+ increase over the current year. 

Plug Power Outperforms The Competition 

Plug Power put in a weaker than expected quarter for Q2 but this is only with respect to the analyst's estimates. The company posted $151.27 million in net revenue for a gain of 21.44% over last year compared to more tepid results from FuelCell And Ballard Power Systems. FuelCell Energy grew a mere 17% compared to its better-positioned competitor but still only brought in $16.35 million in revenue. That’s less than 10% of Plug Power’s business and the outlook for the two is far from similar. Ballard Power, on the other hand, whose business is more in-line with Plug Power, brought in a slightly stronger $20.9 million for the 2nd quarter but this is down on a YOY basis and the company scaled back its outlook for the year. The takeaway is that hydrogen fuel cells are a growing market and one that Plug Power is dominating. 

Plug Power Is The Leader In Hydrogen Fuel Cells 

The hydrogen fuel cell market got a lift in the wake of the pandemic but that boost has since passed. In regard to the market, Plug Power has led the group the entire time and is poised to move higher now. Assuming the market follows through on the recent signals, the price action should move up about $14 to the $40 to $42 range by the end of the year. If the company continues to build on its obvious momentum it could break out to a new multi-year high.