Hydrogen is quickly becoming an essential part of the green energy matrix. For this reason, I recommend that investors consider the best hydrogen stocks to buy.

The hydrogen market is expected to expand in the future, with estimates placing it at $410 billion by 2030. This growth is due to increased innovation and significant spending on hydrogen infrastructure globally, especially from entities such as the U.S. Department of Energy, which has spent $1 billion on hydrogen production projects​.

Hydrogen has huge potential as it does not contribute to greenhouse gas emissions when used in fuel cells, the only product being water. This, therefore, makes it a very viable source of energy when compared with fossil fuels. Regions such as the European Union, China and other nations are investing in hydrogen infrastructure to achieve carbon neutrality by 2050. Therefore, the backdrop for these best hydrogen stocks looks attractive to many.

Here are three companies that investors should consider.

Air Products and Chemicals (APD)

I recommend Air Products and Chemicals (NYSE:APD) because of its strong financials and management’s strategic plans. In Q3 2024, the company exceeded its EPS guidance and secured several long-term hydrogen contracts, including 70,000 tons of green hydrogen annually starting in 2030.

The demand for hydrogen output is evident through its project backlog, including the construction of two new air separation units in Georgia and North Carolina. It has also divested from its LNG business to focus on more promising market opportunities, such as hydrogen.

APD also has a dividend increase streak of more than 40 years and an EBITDA margin of approximately 40%. Therefore, the company is one of the best hydrogen stocks for investors to consider. It could be the least speculative company in the industry.

FuelCell Energy (FCEL)

FuelCell Energy (NASDAQ:FCEL) is an undervalued opportunity poised for growth. It has a notable presence in South Korea. The $160 million contract with Gyeonggi Green Energy to service fuel cell modules at the Hwaseong Baran Industrial Complex is a major step forward for FCEL’s financial improvement. According to Investing.com, “FuelCell Energy’s presence in South Korea aligns with the country’s 2019 Hydrogen Economy Roadmap, which aims to produce 15 gigawatts of power from fuel cells by 2040.”

South Korea and wider East Asia are major growth markets for these best hydrogen stocks and some of the largest EV markets. This bodes well for FCEL, as analysts predict that it will reach an inflection point for its earnings and revenue over the next several years. Notably, its revenue is set to surge to $575.11 million in FY2028, up from a predicted $217.17 million in FY2025. EPS improvements are also on the horizon.

Nikola (NKLA)

I’m optimistic about Nikola (NASDAQ:NKLA) as it continues to innovate in the hydrogen truck industry. The recent delivery of 72 hydrogen fuel cell trucks in Q2, surpassing expectations, is a major reason for my bullishness on NKLA as one of the best hydrogen stocks.

NKLA also announced other efforts to improve its valuation in the future. This included building its hydrogen refueling network and undergoing a significant company restructuring. Last year, it divested some of its ill-fated acquisitions, such as Romeo Power, and has committed to investing solely in the U.S. market. The restructuring and improved focus on its core operating segments should help it reduce costs in the future, with cash usage expected to decrease to under $400 million by the end of the year. 

At just $7.61 per share, NKLA is a very risky stock, but it may also deliver outsized returns for those with extreme risk tolerance.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.