Plug Power (NASDAQ:PLUG) recently reported that it reached maximum nameplate capacity at its plants in Georgia and Tennessee. However, that may not be entirely positive. This means that the hydrogen fuel cell company is producing 25 tonnes of liquid hydrogen every day. While demand for Plug’s main product is clearly robust, the market isn’t reacting well to this news. Indeed, PLUG stock is down today, even after the company announced new partnerships with clients in both Europe and the United States. This suggests that it may take quite a bit of momentum for shares of Plug to snap their losing streak.
Does all this mean that investors seeking exposure to the hydrogen space should focus disregard PLUG stock? Let’s dive deeper into this news and assess what it’s likely to mean for Plug Power in the long term.
What’s Happening With PLUG Stock?
PLUG stock is down 1.6% as of this writing. After a month of consistently losing value, shares could certainly use a growth catalyst. However, given how poorly PLUG has performed over the past six months — in the red by over 60% — many investors have likely soured on shares.
It makes sense that trading would be volatile today, given the mixed nature of Plug Power’s news. While demand appears strong, the report of the company reaching max capacity suggests that it may not be able to fully meet that demand. As Renewables Now reports:
“This milestone now allows Plug to meet around 50% of its customers’ green hydrogen demand, through a cryogenic fleet of 40 trailers. The hydrogen is being supplied to customers across the United States in material handling operations, fuel cell electric vehicle fleets, and stationary power applications […] [Plug Power] is also working on another, 15-TPD production facility in Louisiana. The project is realised in partnership with chlor alkali producer Olin Corporation and is expected to achieve mechanical completion by the end of the third quarter of 2024.”
If that partnership proceeds as planned, PLUG could certainly benefit late in 2024. But as today’s performance reminds us, sometimes news of progress isn’t enough to boost shares. As InvestorPlace contributor Chris MacDonald speculates, Plug Power’s problems and lack of momentum for its stock suggest that the hype surrounding green hydrogen may be deflating. That could make things worse for PLUG stock.
What Comes Next?
For all its problems, PLUG stock has hung in there, battling severe macroeconomic conditions and stiff competition. But even on a good day, things haven’t looked very good for the company in a long time.
It’s hard to say how much the recent nameplate capacity milestone will help Plug Power in the near term. Right now, though, things look complicated — just as they have since 2023. Many investors will likely want to steer clear of this troubled stock.
On the date of publication, Samuel O’Brient 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.
