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Why Plug Power Stock Is Soaring Today

In Business
May 04, 2024

Recovering from what had been a disappointing start to the week, Plug Power (NASDAQ: PLUG) stock is ripping higher today. With the company’s announcement of a potential new partner, investors are energized about picking up shares of the fuel cell specialist.

As of 1:52 p.m. ET, shares of Plug Power are up 8.8%, retreating from their earlier rise of 13.5%.

Investor optimism is rising thanks to a possible deal Down Under

Plug Power and Allied Green Ammonia, an Australian ammonia production company, are exploring the development of a hydrogen-to-ammonia production facility in the Northern Territory of Australia. Should the project advance, Plug Power will supply up to 3 gigawatts of electrolyzer capacity.

With the memorandum of understanding signed, the two companies will collaborate on a design and engineering plan for the project, which is expected to be released in the coming weeks. The companies, moreover, expect a final investment decision to be made in the fourth quarter of 2025 with the further potential for Plug to deliver electrolyzers beginning in the first quarter of 2027.

Is now the time to power your portfolio with Plug stock?

News of a potential new partnership in Australia may seem encouraging, but it’s important to recognize that a memorandum of understanding is not legally binding, and it’s quite possible that the project never comes to fruition. Additionally, Plug Power has a long history of announcing promising supply deals, but it has no history of generating profits.

With its lengthy history of producing net losses, hydrogen-focused investors should wait for Plug to prove that it can find a way to make its hydrogen and fuel cell endeavors lucrative before deciding to click the buy button on Plug stock.

Should you invest $1,000 in Plug Power right now?

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Scott Levine 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.

Why Plug Power Stock Is Soaring Today was originally published by The Motley Fool

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