For over a year now, one of my favorite growth stock stocks to buy and hold to generate exponential long-term wealth has been hydrogen fuel cell maker Plug Power (NASDAQ:PLUG). Indeed, in my financial newsletter, The Daily 10X Stock Report, I told subscribers to buy PLUG stock back in May 2020 at just $4.

Since then, it has soared as high as $75 — representing a jaw-dropping gain for Daily 10X subs of 1,700% in less than a year (to read more about that newsletter — which is aimed at getting in early on the biggest breakout stocks in the market — click here).

But back to PLUG stock, shares of this long-term winner have come under significant pressure over the past month as rising rates have freaked out investors and put downward pressure on equity valuations. From its recent highs, PLUG stock is down more than 30%.

This dip is a golden buying opportunity.

• The Amazon of Houses: This Stock Is Like Buying Amazon in 1997

Why? Three big reasons:

1. The rising rates fear that is spooking the stock market — and specifically growth stocks like Plug Power — is completely overblown. It will pass, soon, and without inflicting much more damage.
2. PLUG stock is fundamentally undervalued at $50 relative to the company’s long-term earnings growth potential in the various verticals of the multi-trillion-dollar Hydrogen Economy.
3. The technicals underlying PLUG stock imply that shares have bottomed, and are in the processing of reversing course back into a long-term healthy uptrend.

Long story short, near-term dips in long-term winners are almost always buying opportunities. This is no different. You have a near-term dip, in a long-term winner, with signs that the worst of the near-term dip is over.

That means it’s time to buy PLUG stock.

Here’s a deeper look:

PLUG Stock: Rising Rates Fear is Overblown

The first reason to buy the dip in PLUG stock is because the catalyst for recent weakness — a sharp rise in the 10-year Treasury yield — is overblown.

The benchmark 10-year Treasury yield has risen sharply in February. It has gained almost 50 basis points. That’s a historically fast upswing in yields. And it’s troublesome for growth stocks, because valuations are inversely correlated to Treasury yields. In theory, higher yields mean lower valuations.

But yields have overshot their “fair value”, and will start to settle down in the coming months.

The 10-year Treasury yield has, over the past five decades, closely tracked the 3-month Treasury yield (a proxy for inflation, which the Fed controls with its target interest rate) plus real GDP growth. The correlation is very, very strong. In today’s numbers, that means the 10-year Treasury yield should finish 2021 at 2% — since the Fed has promised not to move on rate hikes (implying a near-zero 3-month yield) and real GDP growth after the 2021 “bounce-back” is projected at a 2% run-rate over the next few years.

0% 3-month yield + 2% normalized real GDP growth = 2% 10-year Treasury yield.

Now, importantly, the Fed has promised to remain on hold for three years, and there are massive deflationary forces via globalization and automation that should keep inflation muted for the foreseeable future. Thus, the 3-month yield will likely hover around 0% for the next few years, while real GDP growth will continue to hover around 2%, meaning the “fair yield” on the 10-year Treasury will remain around 2% for most of 2022 and 2023.

We are at 1.4% today. That means yields aren’t going to rise much over the next few years — and that the widespread rising rates fears today are completely overblown.

Yields will calm down. And soon. Once they do, growth stocks — like PLUG stock — will kick back into gear.

Plug Power Stock Is Fundamentally Undervalued

The second big reason to buy the dip in PLUG stock is that shares are fundamentally undervalued today relative to the company’s long-term earnings growth potential.

The big idea here is that the Hydrogen Economy is on the precipice of becoming mind-bogglingly huge. In short, the world is pivoting towards clean energy sources. This shift is inevitable. It is happening very quickly. And it will leave no stone unturned. By 2040/50, the world will be run on renewable energy sources.

Hydrogen will be one of the largest renewable energy sources in this new “Green World”. That’s because hydrogen — as the lightest element in the Universe that also doubles a non-intermittent, storable energy source that produces zero-emissions when sourced from solar and wind — has huge economic and technologically advantages over other renewable energy sources.

Of most importance, hydrogen – thanks to its unmatched energy density as a result of being the lightest element in the universe – beats every other clean-energy battery when it comes to range, recharging times and emissions. So, in heavy-usage and long-range situations, hydrogen fuel cells are the best renewable energy source. To that extent, hydrogen fuel cells will likely be the dominant clean energy source for industry, cross-country haul and stationary.

Think forklifts in warehouses… trucks that have to travel across the country, and ships that have to travel across oceans… data-centers that have to be “always on”.

Hydrogen fuel cells are on the cusp of disrupting those industries over the next decade, much as electric batteries are on the cusp of disrupting passenger vehicles.

Plug Power is at the epicenter of this disruption. In providing HFCs to the biggest warehouse operators in the world like Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) for use in their forklifts, Plug Power has developed the world’s best hydrogen fuel cell technology. The company is now leveraging that industry-leading technology to partner with established companies like Renault and SK Group to develop best-in-class HFC solutions for use across all verticals of the Hydrogen Economy, from forklifts to trucks to data-centers.

Net net, by 2030 when the Hydrogen Economy is massive, Plug Power’s fuel cells will be powering tens of millions of forklifts, millions of trucks, and hundreds of data-centers.

My modeling suggest that, by then, Plug Power will be earning about $6 per share. Based on a 25X forward earnings multiple and a 10% annual discount, that implies a 2021 price target for PLUG stock of nearly $60.

Technical Support Is Here

The third big reason to buy the dip in PLUG stock is that technical support has arrived for the stock.

Ever since PLUG stock started breaking out in early June 2020, shares have consistently formed a strong support line at the 50-day moving average. The stock tested and held the 50-day in late July, late September, and early November.

PLUG stock tested that 50-day last week. The support line briefly broke. But almost immediately, shares reversed course and retook the 50-day line. This is a sign that this break is temporary, and that the uptrend in PLUG stock will resume.

To that end, it looks like the worst of this near-term sell-off in Plug Power stock has already come and gone.