I Almost Never Sell My Winners, but Plug Power Might Be an Exception

There's little doubt hydrogen-powered fuel cells will be part of our future. They've proven to be a reliable source of backup power in some limited applications, but as costs continue to sink, they're coming into view as an off-grid alternative to utility-supplied electricity. In the meantime hydrogen fuel cells are under the hoods of more and more vehicles. Energy strategy consultancy E4tech estimates in 2019 -- before the COVID-19 pandemic presented logistical challenges -- automotive drivetrains accounted for the bulk of that year's 40% increase in fuel cell systems shipments.

Of course, it also doesn't hurt that new leadership in Washington D.C. supports environmentally-friendly power. President Biden even prioritized making "green hydrogen [available] at the same cost as conventional hydrogen within a decade" during his campaign, which could it a viable fuel source for power production plants. The only thing really holding fuel cell movement back so far is a lack of hydrogen production scale and its corresponding infrastructure. But, even that's changing. The International Energy Agency forecasts annual global production of 7.9 million tons of hydrogen in 2030, up from 2019's output of less than 400,000 tons.

Given this backdrop, it's not surprising shares of fuel cell name Plug Power (NASDAQ: PLUG) are up on the order of 700% for the past six months. The company even raised its long-term revenue guidance on Tuesday, underscoring the idea that the $10 trillion hydrogen power economy is finally starting to gel. It's clearly a promising opportunity.

Source Fool.com