Global governments have been steadily announcing targets to reduce their carbon footprint and have outlined plans to move away from a reliance on fossil fuels. Both the European Union and the United Kingdom have plans for net carbon neutrality by 2050, while the United States aims to cut greenhouse emissions in half by 2030. These lofty environmental goals will require a monumental shift towards renewable and low-carbon energy sources.
A host of the world's wealthier countries have already outlined plans to invest heavily in this change, with hydrogen power being one of the leading methods mentioned. With this global confidence in the growing hydrogen market, we examine three opportunities to invest in hydrogen that we feel could be good long-term investments.
Plug Power (NASDAQ: PLUG) is a New York-based hydrogen fuel cell manufacturer. Its existing customer base boasts Fortune 500 companies such as Amazon and Nike. On top of this, it also has several extremely lucrative commercial partnerships. In June, a partnership with Renault was announced centering around the production of hydrogen-powered vans.
Added to this, recent partnership announcements with Phillips 66 and Airbus have led to a stock price surge. Analysts across Wall Street responded by raising their price targets on Plug Power. Median estimates predict a 32% increase but some of the more optimistic targets have the stock price rising by up to 150%.
Numerous decisions in recent months have made the case for Plug Power to continue to scale up for the foreseeable future. With work having begun on its third green hydrogen plant in September, Plug will soon have the means to massively accelerate its hydrogen output. This increased capacity will bode extremely well for the company as the entire hydrogen ecosystem looks to scale up indefinitely.
Ballard Power Systems (NASDAQ: BLDP) is a world-leading producer of proton-exchange membrane fuel cells. These cells are primarily used in transport, with Ballard cells currently utilized in powering buses, commercial trucks, trains, marine vessels, cars, and forklifts. Recently, Ballard announced a deal to provide fuel cells for high-speed light rail company Talgo. This partnership could prove to be highly lucrative, as Talgo has future plans to retrofit many of its diesel-powered trains to a more sustainable energy system.
Ballard also recently outlined a new strategic partnership with Forsee Power, a leader in smart battery systems. This partnership will enable both companies to provide a fully integrated system for powering medium and heavy-duty vehicles. By combining the efforts of two leaders in varying areas of hydrogen technology, the number of friction points in the implementation of this technology will likely decrease.
These announcements, coupled with bullish sentiments for Ballard's future growth from many analysts, make the company an interesting investment for the coming years. Ballard's focus on the automotive industry places it well in ensuring continued growth as many auto companies search for ways to meet emissions targets in the near future.
California energy giant Bloom Energy Corporation (NYSE: BE) produces energy servers that work without any form of combustion. Their recent forays into the hydrogen market have been welcomed by investors. In September the company announced the commercial availability of its hydrogen-powered fuel cells. This important development will allow the company to migrate into residential power, further boosting its revenue-generating capacities.
The company also benefits from a substantial partnership with SK Engineering and Construction. This partnership alone generated over $1 billion in revenue through the sales of fuel cells in South Korea.
Q2 financial results showed a 21.6% year-over-year (YoY) increase in revenue. This, along with the consistent improvement in earnings per share across the previous three years, displays the advancements the company is making from a financial standpoint. Already being able to name 25 Fortune 100 companies as its customers; Bloom is expected to continue to grow as more large companies seek to lower their carbon footprint while still maintaining a reliable source of 24/7 power.
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