As mid-term elections near, we’re approaching the 11th hour in respect to how many promises President Joe Biden will fulfill. One of the central tenets of Biden’s economic agenda had been support for climate change investments. For hydrogen stocks Plug Power (NASDAQ:PLUG), FuelCell Energy (NASDAQ:FCEL) and Bloom Energy (NYSE:BE), this is perhaps more important than any other sector.
That’s because green hydrogen isn’t yet commonplace in the United States. Far from it. The infrastructure needed to support hydrogen as a viable fuel source is significant — and it likely won’t come about without government support.
Accordingly, hydrogen stocks are revving up on today’s news that Biden may soon issue executive action on climate change. Each of these hydrogen companies are up between 2% and 4% at the time of this writing.
Let’s dive into what investors may want to make of today’s price action.
Is Now the Time to Buy Hydrogen Stocks?
Any sort of positive indication about Biden’s climate change plans is good for hydrogen stocks. As mentioned, the sector is perhaps in the greatest need of federal support. Thus, on some level, one might expect today’s rally to be much more impressive than it is.
However, it’s understandable why investors aren’t growing too bullish just yet. There are still hurdles for hydrogen companies to overcome in order to receive funding. Additionally, we still don’t know how much money the government will put toward green hydrogen specifically.
One of the biggest criticisms of hydrogen-powered vehicles is that a lot of produced hydrogen — or at least the most cost-effective hydrogen — comes from natural gas. There is green hydrogen, which is more expensive. But many view hydrogen overall as more of an intermediary step toward longer-term, truly sustainable energy generation.
For now, the market’s overly skeptical view on hydrogen stocks is probably warranted. Biden’s upcoming climate policy is certainly an exciting update. Until something is finalized, though, investors shouldn’t get too ahead of themselves.
On the date of publication, Chris MacDonald did not hold (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.