PLUG And FCEL: Should You Invest In Fuel Cell Stocks?

2021 is off to a bewildering start. While the world is mostly focused on what’s going on in Washington, the stock market has also been charting its own tortuous course. Stocks tend to be forward-looking, but it’s always interesting when there seems to be a major disconnect between what happens in the financial markets and the rest of the reality.

Photo Courtesy of FuelCell Energy

One notable development so far has been the explosive rise of fuel cell stocks. That’s not to say hydrogen fuel cell companies were left in the cold last year. However, we’re in the midst of a massive surge in investments in this industry.

The surge was sparked by Plug Power (PLUG). The company announced that SK Group out of Korea would be taking a $1.5 billion stake. At $15 billion in market cap, that’s a huge deal for the de facto leader in the fuel cell space.

PLUG was up over 30% on the news, but it carried several others in the industry higher. Bloom Energy (BE) jumped 10% the same day and FuelCell Energy (FCEL) over 20%. Investors are certainly taking the PLUG deal as a boon for the industry as a whole.

But should investors be aggressive in buying fuel cell stocks? Let’s look at the pros and cons.

In the age of climate change concerns, carbon-based emissions are the biggest of those concerns. Hydrogen fuel-cells release water vapor (aka steam), so there’s no carbon involved. What’s more, there is essentially an infinite supply of hydrogen. That is, it’s absolutely a renewable energy source.

On the other side of things, the technology to collect and store hydrogen at a commercial level is still quite expensive. It’s not economically viable at this point and could be years before it becomes so. Who’s to say that by the time commercial fuel cells become achievable, there won’t be other/better means of providing clean fuel?

Of course, there are more pros and cons to fuel cells, but those are the primary arguments from either side. Regardless, it seems that the industry has run ahead of itself. The fuel cell companies don’t expect to be consistently profitable for years, yet their valuations are in the multi-billions.

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Tiffany Jackson 2 weeks ago Member's comment

Yes, it is the future!