Fuel cell and hydrogen firm Plug Power (NASDAQ:PLUG) has been making significant moves of late. In a different market cycle, like that which existed in 2021, PLUG stock would likely be booming on the news.

However, this year is much different than last, and that must cause investors to carefully analyze cyclicality as it relates to the immediate investment horizon.

Big Win

You have to hand it to Plug Power. If the hydrogen economy becomes the $1 trillion annual industry that Goldman Sachs (NYSE:GS) expects, then PLUG stock could multiply in value moving forward. 

After all, the company recently won an order to deliver a one-gigawatt electrolyzer to H2 Energy Europe in Denmark. That electrolyzer will be used to produce green hydrogen which could supplant the role of natural gas in an environmentally friendly fashion.  

Importantly, that electrolyzer is scheduled to be the largest installation globally. That alone suggests that Plug Power could multiply in value. If it provides the infrastructure for a cleaner energy future, the sky’s the limit. 

But it remains vitally important to understand that Goldman Sachs’ expectation of a $1 trillion annual industry is far in the future, in 2050. Currently, the hydrogen economy is worth a relatively tiny $125 billion annually. 

And Another Win

Plug Power is clearly making a name for itself in Europe, with its openness to green energy. Not only is the company building a 1-gigawatt capacity electrolyzer in Denmark, but another 100-megawatt plant in Belgium. 

That plant will supply roughly 10% of the capacity of the Denmark plant but the trend is clear: Plug Power is making significant headway in Europe. 

The problem, again, is the relatively long investment horizon required with the commissioning of the Belgium plant not expected until 2025. 

Given Plug Power’s recent earnings results, investors should be wary. 

Earnings Disappoint for PLUG Stock

For one, Plug Power is a growth stock. That means investors expect it to lose money. And it did. Last year, in the first quarter, the firm reported a net loss of $60.74 million. It didn’t matter then, though. Share prices were double what they currently are despite revenues that were 96% lower. 

But again, 2022 is not 2021. So, despite the fact that Q1 ‘22 revenues increased 96%, it did not matter. The market was much more interested in the fact that Plug Power reported a $156.48 million loss that was also an earnings miss. 

That’s what current investors must be wary of: The market isn’t tolerating losses or fundamental weakness. The Fed is upping interest rates and quantitative easing is over. That means that PLUG stock is out of fashion despite the fact that its long-term prospects are brighter on the wins in Denmark and Belgium. 

Investors who jump into PLUG stock now are making a long-term bet that will take years to materialize. The gains could be massive, but it remains a bet that will require capital to be parked for a long period. 

On the date of publication, Alex Sirois 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.