The global hydrogen market is getting explosive, creating big opportunities for hydrogen stocks. According to Research and Markets, the global hydrogen market could be worth about $410.6 billion by 2030 from $242.7 billion in 2023. Global demand for emission-free hydrogen continues to grow.
“Clean hydrogen is the ‘Swiss Army Knife’ of zero-carbon solutions because it can do just about everything: Powering trucks, buses, and airplanes…Heating homes and fertilizing crops…Revolutionizing shipping…and cleaning up America’s manufacturing industry,” noted U.S. energy secretary Jennifer Granholm.
Additionally, according to Goldman Sachs, $5 trillion of investment is needed in the clean hydrogen supply chain if we want to reach net zero. Therefore, if you haven’t added hydrogen stocks to your portfolio yet, start doing so now, particularly with these three.
Plug Power (PLUG)
Over the last few weeks, Plug Power (NASDAQ:PLUG) rocketed from a low of about $2.26 to a recent high of $5.14. This was thanks to three key catalysts.
One, the company has a new hydrogen plant in Georgia. It can reportedly produce 15 tons per day of liquid electrolytic hydrogen. According to the company, that’s “enough to power approximately 15,000 forklifts per day.”
Two, analysts at Roth MKM just upgraded the PLUG stock to a buy rating, with a price target of $9 a share. Three, CEO Andy Marsh says he’s confident the company will emerge in a strong position by the end of the year, even if the next few months are “dicey,” as noted by Barron’s.
However, I wouldn’t buy it just yet.
After such an explosive move, PLUG is overdue for a healthy pullback. Once that happens, I’d eventually like to see PLUG test $12 with the hydrogen story heating up again.
Air Products and Chemicals (APD)
There’s also Air Products and Chemicals (NYSE:APD), which had a disastrous start to the week.
On Monday, the APD stock gapped from about $260 to $220 after the company cut guidance. NOw, it expects to see fiscal 2024 earnings guidance of between $12.20 and $12.50 from prior guidance of between $12.80 and $13.10. Also, it posted fiscal Q1 earnings of $2.82 a share on revenue of $3 billion. That fell below expectations for $3 on revenue of $3.2 billion.
“Our reported results were lower than our expectations, mainly due to a slowdown in manufacturing in Asia, particularly in China; lower helium demand; cost headwinds from a sale of equipment project; and currency devaluation in Argentina,” Chief Executive Seifi Ghasemi said, as quoted by Barron’s.
Once the negativity has been fully priced in, I’d buy what appears to be a severe overreaction. Plus, as investors wait for APD to recover lost ground, they can collect APD’s current yield of 3.25%. APD also just declared a quarterly dividend of $1.77 per share. It’s payable on May 13, 2024 to shareholders of record at the close of business on April 1, 2024.
Global X Hydrogen ETF (HYDR)
Or, you could always diversify with top hydrogen stocks, with the Global X Hydrogen ETF (NASDAQ:HYDR).
With an expense ratio of 0.5%, the ETF invests in stocks involved with hydrogen production, and the development and manufacturing of hydrogen fuel cells. Some of its top holdings include Bloom Energy, Plug Power, Ballard Power (NASDAQ:BLDP), ITM Power (OTCMKTS:ITMPF) and Ceres Power (OTCMKTS:CPWHF).
While its chart is nothing to write home about, give it time. With a good deal of excitement in hydrogen, HYDR could easily bounce well off its current low.
On the date of publication, Ian Cooper did not hold (directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
