Equities related to the once-burgeoning hydrogen market are largely worth avoiding in 2024. The demand for renewable energy, especially one as expensive to produce and transport as hydrogen, has been rather for well over a year. While the Biden Administration’s Inflation Reduction Act (IRA) has catapulted investment into the space, tax credits and subsidies have not been as generous to hydrogen energy investments as they have been solar and wind. The Global X Hydrogen ETF (NASDAQ:HYDR) tracks 29 hydrogen companies that operate across various facets of the space, and this ETF has fallen more than 25% in 2024 alone. If we zoom out to over the past twelve months, HYDR has fallen 45% as of last Friday. This is a broader indication that investors should be wary of hydrogen stocks to avoid.

If a market crash occurs, which is still possible given the macroeconomics and the high valuation many U.S. equities boast, these are going to by the pure-play hydrogen stocks to avoid.

Ballard Power Systems (BLDP)

Ballard Power Systems (NASDAQ:BLDP) is the first pure-play hydrogen stock to avoid on this list. The company creates proton exchange membrane (PEM) hydrogen fuel cells for larger vehicles, including trucks, busses and trains. While having industrial end-markets may seem because of their perceived stability, Ballard Power’s historical revenue growth has been anything but stable. 2023 saw Ballard Power report a 25% increase in top-line growth, but a year before revenues had declined by about that much. 2021 and 2020 also saw Ballard Power’s revenue growth just ebb and flow.

Of course, Ballard Power is also a perpetual loss maker, and given the lack of even growth in the green hydrogen space in general, investors can expect losses to continue accumulating in the future. Shares have already plummeted nearly 30% on a year-to-date basis. If rates stay elevated, investor risk appetite for green hydrogen projects could dry up, putting BLDP shareholders at risk.

Plug Power (PLUG)

Plug Power (NASDAQ:PLUG) has a number of notable similarities to Ballard Power. The hydrogen startup specializes in making hydrogen fuel cells, particularly for the mobility end-markets. This translates into fuel cells for forklifts, trucks and buses. Moreover, Plug Power has a keen focus on the logistics sector, which happens to be a fast-growing customer base. Whether or not this customer set continues to demand more hydrogen fuel cell products remains to be seen. Companies like Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) count themselves amongst Plug Power’s customers, but it remains unclear whether or not these two logistics giants are just making surface-level commitments to green energy or serious ones.

Plug Power’s revenue growth in the last two years has been in the solid double-digits, but its operating costs have ballooned out of proportion. So much that Citigroup has downgraded PLUG shares to “Sell” due to “limited liquidity, relatively high-cost structure, dilution from capital raises and tough competition.”

FuelCell Energy (FCEL)

Rather than developing hydrogen fuel cells and inserting them into renewable energy products, FuelCell Energy (NASDAQ:FCEL) leverages fuel cells to develop stationary power generation for a number of customers. Unfortunately, there doesn’t seem to be a stable end-market for FuelCell’s power generating solutions. In the first quarter of 2024, FuelCell’s revenues followed the same downward trend they had in 2023. First quarter revenue contracted by 57% percent from $37.1 million to $16.7 million.

Slowing growth and burgeoning costs are not what anyone wants to see in a start-up. Not mention, FuelCell Energy does trade below $1/share, which makes it both volatile and relatively illiquid. Stocks with slowing top-line growth are typically the first to get hit when a market crash occurs, so better to avoid FCEL now before markets get choppier.

On the date of publication, Tyrik Torres 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.