In a recent sector update, RBC Capital Markets expressed optimism towards UK hydrogen stocks, particularly highlighting ITM Power PLC as a strong investment choice. ITM Power's commercial momentum has been on the rise, leading to increased revenue and cash guidance for 2025. The company's focus on clearing out less profitable contracts and securing newer deals with better margins has impressed analysts. RBC believes that the market is undervaluing ITM Power, attributing little worth to its core business despite a strong cash position. On the other hand, Ceres Power Holdings PLC faces challenges related to partner risk and technology, impacting its growth prospects. RBC maintained a 'sector perform' rating for Ceres Power. The UK hydrogen sector is receiving a boost from government initiatives like the HySpeed project and HAR2 funding rounds, creating a favorable environment for companies like ITM Power. Despite industry consolidation and tightening funding conditions, RBC sees potential for long-term growth in the UK hydrogen market. Investors are encouraged to look past short-term volatility to capitalize on opportunities, with ITM Power standing out as a promising player.