Plug Power (NASDAQ: PLUG) stock’s disastrous performance from 2024 is continuing into 2025. After plunging by 53% last year, shares of the hydrogen fuel cell maker slumped by another 12.7% in January, according to data provided by S&P Global Market Intelligence.
From a business standpoint, January was a huge month for Plug Power as it struck a “monumental” deal and closed a much-needed loan agreement with the Department of Energy. Some recent events, however, have spooked investors with regard to the hydrogen stock.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
In mid-January, Plug Power announced a deal to supply 3 gigawatts (GW) of electrolyzer capacity to Australian company Allied Green Ammonia to power a solar plant that will produce green ammonia. It’s a huge deal given the electrolyzer capacity, and important too, considering that Plug Power is banking heavily on electrolyzers to drive its revenue growth in the coming years.
Around the same time, Plug Power closed a $1.66 billion loan guarantee from the Department of Energy. The loan guarantee was a huge relief as Plug Power is consistently burning cash, so much so that management even issued a going concern warning in late 2023. Plug Power will use the funding from those loans to construct up to six green hydrogen plants in the U.S.
Despite the two positive developments, investors’ hopes were nipped in the bud after President Trump issued a barrage of executive orders on his first day in office, including one that froze the release of the remaining government funding for green hydrogen projects that won billions of dollars in awards under the Biden administration. Hydrogen stocks, including Plug Power, plunged in the wake of Trump’s orders.
That sell-off deepened after Chinese artificial intelligence (AI) company DeepSeek rattled the tech industry with an open-source large language model (LLM) that it asserted it had developed at a small fraction of the cost of similar models such as ChatGPT.
Plug Power may not be an AI company, but new AI data centers are expected to drive heavy demand for clean, stable power that technologies like hydrogen fuel cells can provide. Investors fear that DeepSeek could presage a shift to LLMs that require significantly less processing power, which would in turn lead to a slowdown in the build-out of U.S. data center infrastructure. That would throttle a key growth market for Plug Power.
Investors and analysts alike are turning cautious about Plug Power. Last month, for instance, Seaport Global Securities analyst Tom Curran downgraded his rating on the hydrogen stock to a sell and gave them a price target of $1 per share. That’s almost 50% lower than Plug Power’s stock price as of the time of this writing.
Curran highlighted the recent unfavorable developments in two of Plug Power’s most important markets, North America and Europe, focusing particularly on Trump’s executive orders, which could put the company’s federal loan guarantee at risk.
In addition, management’s revised guidance is for slower revenue growth than its earlier projections, and it remains to be seen whether the company can achieve a positive gross margin by the end of 2025 as it expects. Long story short, Plug Power stock’s path to recovery may not become visible anytime soon.
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $333,669!*
Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,168!*
Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $547,748!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of February 3, 2025
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
—
Blog powered by G6
Disclaimer! A guest author has made this post. G6 has not checked the post. its content and attachments and under no circumstances will G6 be held responsible or liable in any way for any claims, damages, losses, expenses, costs or liabilities whatsoever (including, without limitation, any direct or indirect damages for loss of profits, business interruption or loss of information) resulting or arising directly or indirectly from your use of or inability to use this website or any websites linked to it, or from your reliance on the information and material on this website, even if the G6 has been advised of the possibility of such damages in advance.
For any inquiries, please contact legal@gsix.org
