Plug Power Soars on Senate's Extension of Hydrogen Tax Credits
Key Ideas
- Plug Power's stock surges 28.5% as Senate extends hydrogen industry tax credits through 2028, boosting hydrogen stocks market-wide.
- Senate's provision in 'Big, Beautiful Bill' gains support from oil companies like ExxonMobil, seeing hydrogen as a clean energy revenue opportunity.
- Despite growth potential, Plug Power faces financial challenges with stagnant sales, operating losses, and cash burn, making it a risky investment.
- Investors with a high risk tolerance may consider Plug as a speculative turnaround play, but caution is advised due to bankruptcy risks even with tax credit extension.
Shares of Plug Power surged by 28.5% as the Senate included an extension of hydrogen industry tax credits in the latest version of the 'Big, Beautiful Bill.' This move, which extends the tax credits through 2028, drove the entire hydrogen stocks market higher. Notably, even oil companies like ExxonMobil are showing interest in hydrogen as a clean energy revenue stream. Plug Power, aiming to transition to 100% clean energy sources, currently relies partly on fossil fuels. However, the company faces financial struggles with declining sales, operational losses, and cash burn despite occasional growth spurts. Investors considering Plug should be aware of the high risk involved, with bankruptcy a real possibility in the future even with the potential tax credit extension. While some investors may see Plug as a speculative turnaround opportunity, caution is advised for most.