Electric vehicle stocks are not the only clean energy plays pushing higher on Monday. In fact, FuelCell Energy (NASDAQ:FCEL) is bracing for its second straight day of massive gains. So why is FCEL stock surging higher today? And what is particularly exciting about the world of hydrogen fuel cells?
Importantly, FuelCell is, as its name implies, a participant in the fuel cell power market. This means that it uses hydrogen fuel cells to supply, recover and store energy. In fact, the company actually operates a fleet of SureSource power plants that use its fuel cells to generate power for various customers. As consumers, governments and businesses increasingly embrace clean energy initiatives, FuelCell Energy and its peers have been trending higher.
However, FCEL stock got a particularly big boost yesterday, and that surge higher is continuing today. What do investors need to know about this upward move?
Well to start, one catalyst behind the rally in names like FuelCell, Plug Power (NASDAQ:PLUG) and Bloom Energy (NYSE:BE) is the recent recovery in oil prices. As we wrote yesterday, the benchmarks for crude oil such as Brent and West Texas Intermediate, were climbing higher. This boosted Exxon Mobil (NYSE:XOM) and Chevron (NYSE:CVX), but it also created upside potential for fuel cell stocks. How?
As Rich Smith wrote for The Motley Fool, the answer is in the potential of hydrogen. Any sort of post-pandemic recovery suggests a rebound in consumption. Such a rebound will boost oil prices and oil stocks as we saw yesterday. But the higher oil prices climb, the more attractive hydrogen fuel cell alternatives look. In short, you can thank Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) for the upward move in FCEL stock.
However, there a few other catalysts hydrogen bulls should be aware of today.
FCEL Stock and the Clean Energy Future
Importantly, there is more than just the economic recovery narrative at play here. Large-scale stakeholders continue to embrace clean energy over traditional sources. For instance, the United Nations yesterday announced the global need to phase out coal power. During a conference, UN Secretary-General António Guterres called on the world to embrace zero-emissions targets. As a result, many investors see a clear path to increased fuel cell adoption.
That presents a nice catalyst for FCEL stock and its peers.
Also, as we reported last week, more and more investors are tuning into the discussion around hydrogen fuel cells. After TV analyst Jim Cramer said fuel cell electric vehicles were a better bet than battery electric vehicles, Nikola (NASDAQ:NKLA) soared. However, Cramer also created a rally for FuelCell, Plug Power and Bloom Energy. For investors, this could mean that increased interest in FCEVs will boost demand for hydrogen fuel cells for vehicles and all sorts of other purposes.
The bottom line? Keep a close eye on hydrogen stocks here.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.