With the uptick in the global alternative energy sector, hydrogen stocks have been thrust into prominence. With the sector flourishing rapidly, there’s no denying the potential for high-return alternative energy stocks. Some quality names in the hydrogen sector could deliver multi-bagger returns, illustrating the lucrative possibilities within the realm.
According to GlobalData, the world’s production capacity of green hydrogen saw a phenomenal 44% growth in 2022, reaching a whopping 109 kilotons per annum (ktpa). Moreover, Markets and Markets project an even brighter future, forecasting the market to top $410.6 billion by 2030. Layer that up with the Department of Energy’s recent $1 billion plan to stimulate clean hydrogen demand, and the case for investing in hydrogen stocks becomes remarkably compelling. After all, Goldman Sachs sees the market reaching $1 trillion by 2050, emphasizing hydrogen’s clean energy and vast opportunity.
New Fortress Energy (NFE)
New Fortress Energy (NASDAQ:NFE) is a distinguished liquefied natural gas (LNG) infrastructure and solutions provider which continues to face its fair share of challenges amidst declining energy prices and negative perceptions of fossil fuels. However, the firm has effectively pivoted toward a more sustainable future focusing on carbon-free energy solutions.
In August 2022, New Fortress partnered with Plug Power (NASDAQ:PLUG), entering into a massive long-term agreement for a 120-megawatt industrial-scale green hydrogen plant in Texas. This ambitious endeavor is expected to be one of North America’s largest facilities, producing over 50 tons of green hydrogen daily.
Furthermore, the company’s investment in Israel-based H2Pro in October 2020 demonstrates a strong commitment to innovative green hydrogen production technology. Hence, New Fortress Energy’s investments and strategic moves align with its aim to become a frontrunner in the global energy transition, making it one of the best hydrogen stock wagers.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is emerging as a powerhouse in the alternative energy sphere, with a strong foothold in the hydrogen economy. Projecting a robust growth trajectory, the company is poised to achieve a turnover of $1.3 billion this year. However, that’s merely the tip of the iceberg; with plans to expand into new and promising territories such as electric vehicles, aerospace, and stationary power, revenue forecasts rise sharply to an impressive $5 billion by 2026 and a staggering $20 billion by 2030.
The company’s ambitious goals don’t stop at sales, as Plug Power anticipates an operating income margin of over 20% by the decade’s end. Given these figures and the firm’s well-planned expansion strategy, the prospects for robust growth across both lines appear feasible and exciting. While maintaining measured optimism, one can’t help but recognize that Plug Power is well-positioned to generate substantial returns over the long term.
Direxion Hydrogen ETF (HJEN)
Direxion Hydrogen ETF (NYSEARCA:HJEN) is an appealing gateway to the burgeoning hydrogen economy. Offering exposure to some of the top hydrogen stocks at a strikingly affordable price below $15 per share, this ETF is much more than a mere bargain. It boasts holdings in 30 different industry leaders across sectors, such as hydrogen production and generation, storage and supply, fuel cells, batteries, and others. With a modest expense ratio of 0.45%, it effectively aligns with the expectations of budget-conscious investors.
The growth potential of hydrogen is massive, particularly in areas where traditional electrification struggles to reach at this time. This adoption is critical in achieving the ambitious global goal of net zero emissions by 2050. Given these facts, Direxion Hydrogen ETF is poised to become a major low-risk, long-term investment in the hydrogen space.
On the date of publication, Muslim Farooque 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.
