Plug Power stock price surged on Monday after the company expanded its relationship with Allied Green Ammonia, a company based in Uzbekistan. It jumped to a high of $1.24, its highest point since April 8, and 78% above its lowest level this year.
Why the Plug Power stock price jumped
Plug Power, a leading player in hydrogen energy, jumped after the company expanded its partnership with Allied Green Ammonia for a new 2 gigawatt electrolyzer project.
The deal will see Plug Power’s electrolizer being the foundation of a new $5.5 billion production facility in the country. This plant will be used to produce products like sustainable aviation fuel, green urea, and green diesel. Alfred Benedict of Allied Green Ammonia said:
“This agreement reflects our deep confidence in Plug’s team, technology, and ability to deliver on bold, world-class projects. We are creating meaningful momentum for global decarbonization—first in Australia, now in Uzbekistan.”
Plug Power stock price also jumped after Paul Middleton, the Chief Financial Officer (CFO) acquired an additional 650,000 shares in the company, continuing a trend that started last month.
Insider share purchases is always a good catalyst for a stock because it signals that they are confident in the company. It is also a sign that they potentially have some insider information. In this case, perhaps the CFO knew about the upcoming Allied Ammonia deal.
Read more: Why Plug Power stock isn’t plugged into my portfolio
Is PLUG a good stock to buy?
While the Plug Power stock price surged, it remains much lower than its all-time high. It has plunged from a high of $75.45 in 2020 to $1.22 today, shedding billions of value. Its market capitalization moved from $42 billion to $1.32 billion.
Plug Power still faces challenges that may affect its future growth. First, the company is still losing millions of dollars a year.
Its annual results show that it had a net loss of $596 million in 2020, $460 million in 2021, and $724 million in 2022. Its net loss then went parabolic in 2023 and 2024, moving to $1.36 billion and $2.1 billion, respectively.
The most recent results showed that Plug Power’s net revenue rose to $133 million from $120 million. Most of this revenue came from the sale of equipment, followed by power purchase agreements.
Plug Power made an operating loss of $178 million and a net loss of $196 million. While these losses were better than last year, the company has a long way to go before it turns a profit.
The other main challenge is the demand for hydrogen. While demand in materials handling is still strong, other areas are still struggling. For example, Toyota has scaled down its ambition for hydrogen vehicles, while Nikola has filed for bankruptcy.
Shell also closed its hydrogen fueling stations in 2024, and most recently, OMV closed its stations in Austria, citing lack of demand. These events mean that the future demand for Plug Power’s hydrogen may be lower than expected.
Plug Power stock price analysis
The weekly chart shows that the PLUG share price bottomed at $0.7930 and has now risen in the past three weeks.
PLUG stock has formed a falling wedge, comprising of two converging trendlines that are about to converge. The Relative Strength Index (RSI) has moved from a low of 28 to 43, its highest swing since January 21.
Further, the two lines of the MACD have formed a bullish crossover. Therefore, technicals suggest that the stock will have a bullish breakout, with the next point to watch being at $3.30, its highest point on January 6. A drop below the support at $0.7930 will invalidate the bullish outlook.
Read more: Plug Power stock is risky, but a short squeeze can’t be ruled out
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