In the last month, Plug Power (NASDAQ:PLUG) stock has jumped 21%. I believe that financial news outlets are largely ignoring an important catalyst for the rally.
Specifically, Airbus (OTCMTKS:EADSY), the giant airplane manufacturer, has unveiled plans to develop a hydrogen-fuel led airplane. In October, Plug Power announced “a strategic partnership with Airbus to study the feasibility of bringing green hydrogen to future aircraft and airports worldwide.” Under the deal, the two firms planned to work on a “roadmap that could deliver green hydrogen to aircraft and the airport ecosystem in the coming years,” Plug Power explained.
In recent weeks, Airbus has been busily developing its plans to start selling hydrogen-fueled planes. The airplane maker intends to equip a discontinued A380 superjumbo jet “with hydrogen fuel technology.” Airbus plans to ensure that a number of its “zero-emissions aircraft” are “in commercial service by 2035.”
That target date may sound like a long time from now, and it is. But a massive hydrogen-fuel ecosystem will need to be set up well before Airbus even starts serious talks with airlines about selling them a hydrogen-fueled plane. And, of course, building such a hydrogen ecosystem will probably take a few years.
Given these points, I think that Airbus and the airlines with which it’s partnering could start seriously negotiating deals to create a green hydrogen ecosystem for planes as soon as 2024.
The latter year does not sound so far away. After Airbus announced its plans for the A380 and signed a partnership with Delta last month to develop hydrogen-powered aircraft, I think some on the Street are realizing that Airbus is very serious about developing such planes. As a result, I believe that some investors understand that major revenue could start flowing to Plug Power from Airbus and its partners sooner than many had believed previously.
Indeed, since Plug Power is in the process of creating a “green hydrogen ecosystem” and has already signed a collaboration deal with Airbus, Plug Power is very well-positioned to become a major supplier of green hydrogen to Airbus and the airlines with which its partners with in its efforts in the hydrogen space.
As a result, over the coming months and years, PLUG stock should get a major lift from Airbus’ project.
On the date of publication, Larry Ramer held a long position in PLUG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
