It’s been a notably strong day for investors in hydrogen fuel cell maker Plug Power (NASDAQ:PLUG). Shares of PLUG stock have surged more than 7% in today’s session on news that the company is partnering with Delta Airlines (NYSE:DAL) to investigate whether establishing hydrogen power infrastructure at the Atlanta airport is feasible.
This will be among the most significant feasibility studies for Plug Power, and could pave the way for a much more sustainable future in the aviation world. The two companies are engaging in this study to determine what sort of investment would be needed to implement hydrogen as a fuel source for future aircraft at the world’s busiest airport.
Such an undertaking would certainly be massive. However, given Plug Power’s leading position in this still-nascent sector, the simple announcement of this study has long-term investors excited. Let’s dive into why that may be the case.
PLUG Stock Surges on Announced Feasibility Study
This study is very meaningful for long-term investors in Plug Power. Investing in renewable hydrogen-related companies like Plug Power requires a very long-term investment time horizon. This technology is currently in use but at a very small scale relative to its potential. Some sort of massive adoption catalyst (such as airlines using renewable hydrogen for flights in the future) is needed for investors to adjust their models higher for the stock.
Plug Power, and other companies in the renewable energy space, are looking to find ways to create revenue and profits today while maximizing their potential long-term. This is one of those easy, low-hanging fruit catalysts many investors have wanted to see for some time. Alongside buses, forklifts and other automobiles, airplane transportation is a key sector that could benefit from economies of scale in the renewable hydrogen space over time.
We’ll have to see what ultimately comes out of this study, and it’s going to likely take some time to hear updates on this front. But the fact that work has begun on at least doing a deeper dive into what’s needed to bring hydrogen fuel systems to the airline sector is a good thing for Plug Power and its peers today.
On the date of publication, Chris MacDonald 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.
