If You Only Buy One Hydrogen Stock for the Next Decade, Consider this One

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Generations from now, the 2020s might be remembered as the Decade of Hydrogen. Indeed, America is already immersed in the green hydrogen revolution, as the Inflation Reduction Act has allocated billions of dollars in incentives to support pro-hydrogen initiatives.

There are even regional “hydrogen hubs” from California to Delaware that have been targeted for special federal funding. From fuel cells in electric vehicles to fertilizer production, and even within the aerospace industry, there’s seemingly no end to the use cases for hydrogen nowadays.

Thus, now is the time to position your portfolio for long-term returns as the American hydrogen build-out gains traction. Of course, you’re free to pick and choose a diversified basket of hydrogen-focused names for your portfolio. Perhaps you might choose to conduct your due diligence on such businesses as FuelCell Energy (NASDAQ:FCEL) and Bloom Energy (NYSE:BE).

However, one stock stands out for me as having the greatest potential for price appreciation in the hydrogen field. I recommend it for a full-decade buy-and-hold position if you truly believe in the long-term growth story for clean-burning hydrogen.

Power up your portfolio with Plug Power stock

If you’ve been following the progress of the clean-energy movement, you’ve probably heard about Tesla’s (NASDAQ:TSLA) gigantic electric vehicle production facility, known as the Gigafactory. As it turns out, Tesla isn’t the only American clean-energy company building a Gigafactory.

New York-based Plug Power (NASDAQ:PLUG) is also building a production plant known as a Gigafactory. The company claims this giant factory will “produce electrolyzers and fuel cells and multiple green hydrogen production plants.” If all goes according to plan, Plug Power’s Gigafactory “will yield 500 tons of liquid green hydrogen daily by year end 2025.”

However, this doesn’t mean Plug Power hasn’t achieved anything prior to the commencement of its Gigafactory. Impressively, the company has “deployed more than 60,000 fuel cell systems and over 180 fueling stations” and asserts that it’s the “largest buyer of liquid hydrogen.”

With all due respect to FuelCell Energy and Bloom Energy, an argument could be made that Plug Power is the emerging U.S. hydrogen king. Ambitiously, Plug Power “plans to build and operate a green hydrogen highway across North America and Europe.” Yet, PLUG stock has been in free fall since 2021 and currently trades at the low price of $7 and change.

Plug Power’s “inflection point”

While the market might not be in the mood to buy PLUG stock right now, at least one analyst group sees growth potential for the long term. Specifically, analysts with HSBC (NYSE:HSBC) initiated their coverage of Plug Power stock with a buy rating and an $11 price target, implying significant upside from the current share price.

The HSBC analysts cited the industry-wide tailwind provided by the Inflation Reduction Act.

“We estimate $8 billion in federal stimulus could be unlocked over the next three years (2024-26) to support the U.S. hydrogen industry,” they stated.

Amid this encouraging backdrop, the expansion of U.S. clean-hydrogen production means Plug Power “could be at an inflection point,” the HSBC analysts added. Since 61% of analysts who cover PLUG stock assigned it a buy or equivalent rating, it’s fair to conclude that HSBC isn’t the only firm projecting long-term value from Plug Power.

Plug Power announces big sales and profit goals

Not long ago at its Vista manufacturing facility in New York, Plug Power hosted its fifth annual Plug Symposium. At that event, the company announced long-term sales and profit objectives that surpassed experts’ forecasts.

Here’s the lowdown. Wall Street’s consensus estimate is for Plug Power to generate roughly $5.5 billion in sales and $1.6 billion in gross profit by 2027. However, at the Plug Symposium, the company disclosed its goal of generating around $6 billion in sales and approximately $1.9 billion in gross profit by 2027.

Plug Power also set a goal of generating $20 billion in annual sales by 2030. Wall Street’s estimates didn’t go that far out, but it’s reasonable to conclude that Plug Power’s long-term revenue objective is quite ambitious.

Traders pushed PLUG stock higher after the company revealed these objectives. Clearly, it’s taking no prisoners in its quest to dominate the clean-hydrogen industry over the coming years.

Still, it could take a while before investors fully embrace Plug Power’s ambitions and push the share price back to where it was in 2022, not to mention its 2021 peak of more than $60. Hence, investors should conduct their due diligence on Plug Power and consider a patient, decade-long position in the stock as a wager on the gradual but ultimately unstoppable pro-hydrogen movement.