PLUG: Why This Hydrogen Fuel Cell Stock Will Be a Green Revolution Winner
Plug Power (NASDAQ:PLUG) plans to create huge amounts of green hydrogen that will be used to power everything from the e-commerce warehouses of Amazon (NASDAQ:AMZN), and Walmart (NYSE:WMT), to planes and trucks. What’s more, PLUG stock is becoming a major seller of the equipment that’s used to make green hydrogen, and it is very well-positioned to benefit from the integration of hydrogen into the economies of America, South Korea, and Europe.
With Plug Power stock poised to play an integral role in powering the green revolution, I recommend that long-term growth investors buy PLUG stock at its current low levels.
A Huge Producer and Seller of Green Hydrogen
Plug Power predicts that its output of green hydrogen will jump from 50 metric tonnes per day (MTPD) this year to nearly 200 MTPD next year, almost 500 MTPD in 2024, and about 700 MTPD in 2027. To accomplish that goal, it has already built two green hydrogen plants, has three more under construction, and plans to build an additional four.
Moreover, multiple major companies are poised to buy large amounts of green hydrogen from PLUG stock. Among these firms are Walmart, which has an option to buy “up to 20 tons per day of liquid green hydrogen” to fuel up to 9,500 lift trucks across Walmart distribution and fulfillment centers.” and Amazon, which has agreed to buy “10,950 tons per year of liquid green hydrogen” from PLUG for its “material handling operations” starting in January 2025.
Moreover, PLUG’s hydrogen fuel cell is powering large vans made by Renault, the large French automaker, and the four green hydrogen plants that Plug intends to build in Europe will likely produce the fuel for all of these vehicles.
Back in the U.S., Nikola (NASDAQ:NKLA), which is making hydrogen-powered trucks, will buy as much as 125 tons per day of green hydrogen from PLUG, and Plug is partnering with United Hydrogen, a maker of small, hydrogen-powered planes, and Airbus (OTC:EADSY), the huge European plane maker. Both firms will likely buy Plug’s green hydrogen eventually.
Poised to Benefit From the Integration of Hydrogen Into Multiple, Large Economies
In the U.S., Plug Power is an integral partner in two of the seven hydrogen hubs that will likely receive a total of $7 billion from Washington. The Biden administration estimates that over $40 billion of private funds will be invested in these hubs. Plug will likely supply green hydrogen as well as the equipment used to make green hydrogen for these hubs.
Moreover, Fortescue, a huge mining company that’s looking to build a large, green hydrogen plant in Phoenix, appears poised to buy a great deal of equipment from PLUG that it will use to make its green hydrogen.
International Partnerships
In South Korea, which is taking steps to become a huge user of hydrogen, Plug is partnering with an industrial powerhouse, SK Group, the second largest conglomerate in South Korea. The companies formed a joint venture two years ago and intend to build a factory that will produce green hydrogen and equipment used to make hydrogen. Plug and SK have agreed to supply hydrogen-powered forklifts to Coupang (NYSE:CPNG), the huge South Korean e-commerce company.
Finally, Plug has already made several deals to supply equipment used to make green hydrogen to European firms. For example, in July, the firm agreed to supply electrolyzers for the continent’s oil and gas sector, and in May, it agreed to supply three major European manufacturers with electrolyzers.
With the EU planning to “produce 10 million tonnes and import 10 million tonnes (of green hydrogen) by 2030” and Plug already having established major inroads on the continent, PLUG stock should get big boosts from Europe.
On the date of publication, Larry Ramer held a long position in PLUG. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
