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Why Is Plug Power (PLUG) Stock Climbing Today?

Plug Power (NASDAQ:PLUG) stock is up nearly 8% today on news that the company has struck a deal with Walmart (NYSE:WMT) to supply the retailer with green hydrogen.

3d render image of hydrogen energy fuel cell from Plug Power
Source: Shutterstock

Plug Power said it will deliver up to 20 tons per day of liquid green hydrogen to power Walmart’s network of distribution and fulfillment centers.

The news, and today’s move higher, is positive for PLUG stock. Shares have declined 16% in the past six months, including a 3% pullback so far this year, to finish trading in New York yesterday at $25.55.

What Happened With PLUG Stock

The agreement will see Plug Power supply up to 20 tons per day of liquid green hydrogen to power material-handling lift trucks across Walmart distribution and fulfillment centers in the U.S. Walmart says the deal with Plug Power is another step in its goal to leverage alternative zero-carbon energy sources throughout its supply chain.

For Plug Power, the deal with Walmart is one of its first major green hydrogen supply contracts. Green hydrogen is produced through the electrolysis of water. It produces only “harmless” oxygen emissions and many analysts view it as one of the cleanest sources of energy available.

Why It Matters

This is not the first time that Plug Power and Walmart have joined forces. The two companies have been working together since 2012. Over the years, Walmart has worked with Plug Power to expand the use of hydrogen fuel cells throughout its facilities. Nearly 10,000 Walmart vehicles now use some form of green hydrogen provided by Plug Power, according to the two companies.

“Sourcing green hydrogen can help bring Walmart closer to reaching our goal of zero emissions by 2040,” said Walmart Senior Director of Supply Chain Maintenance Services Jeff Smith.

For Plug Power, the expansion of its relationship with Walmart helps to validate its technology, which is still being developed. It is also a vote of confidence in its current and future direction. Investors are responding positively to the latest news involving Walmart and bidding up PLUG stock.

What’s Next for Plug Power

PLUG stock gets a nice bounce higher today on news of its latest arrangement with Walmart. The news is also positive for WMT stock, which had risen 8% year to date before today. Going forward, Plug Power will need to secure additional deals with major companies to further attract investors and boost its share price. While green hydrogen remains a developing technology, corporate America is starting to recognize its benefits.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/why-is-plug-power-plug-stock-climbing-today/.

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