Why the electricity stock is up more than 25% this week

After plunging 24% in August, Power socket (PLUG 2.83%) The stock is going ballistic and just posted solid weekly gains — up 25.5% at its trading high this week through 9:40 a.m. ET Friday, according to data from S&P Global Market Intelligence.

The green hydrogen industry is still in its infancy, but more companies and economies are recognizing the potential of green hydrogen to help address the climate change crisis. There have been some notable industry developments this week that are fueling investor hopes for Plug Power.

Green hydrogen attracts attention

Australia has just unveiled a new national hydrogen strategy with more than $5 billion in government incentives as it aims to become a “global hydrogen leader”. Meanwhile, India has announced its mission to become a global hub for “production, use and export of green hydrogen”. Just a few days ago, the auto giant BMW announced plans to launch its first hydrogen fuel cell electric vehicle in 2028 in collaboration with Toyota engine.

Closer to home, the Department of Energy (DOE) issued an announcement of interest this week to fund hydrogen production, infrastructure and fuel cells in the U.S. A few weeks ago, the DOE distributed $62 million in funding for 62 of projects. Plug Power received a $10 million grant for a hydrogen refueling station.

This week, Plug Power also signed its first Technical Evaluation Phase (TEP) contract. Plug Power will provide technical support to Portugal’s H2Driven for 25 megawatts of electrolysers for a green methanol project.

Time to Buy Plug Power Stock?

Plug Power is one of the largest green hydrogen companies in the world and is targeting $20 billion in annual revenue and a gross margin of over 35% by 2030. That seems like a lofty goal, though, given that Plug Power is it expects to generate only $825-925 million. revenue this year versus $891 million in 2023.

An even bigger problem is money, and Plug Power is relying on a $1.66 billion loan from the DOE to build hydrogen plants. If it fails to secure the loan, Plug Power may soon run out of money to survive. Therefore, any rebound in Plug Power stock now could just be a dead cat bounce. Careful.