A lack of price competition has prevented hydrogen energy from garnering investment attention, unlike solar and wind projects have enjoyed. While the Biden Administration did pass the Inflation Reduction Act in 2022, which provides tax incentives and subsidies to clean energy projects, hydrogen stocks haven’t done so well in 2023. Case in point, the Global X Hydrogen ETF (NASDAQ:HYDR) has fallen 42.4% since the start of the year.
Still, clean energy investors should see this slippage in equity value as an opportunity to allocate to a long-term energy trend. Additionally, hydrogen stocks are reaching new lows while energy prices continue upward due to broader geopolitical events. Indeed, now may be the best time for investors to determine the right hydrogen stocks to buy before it’s too late.
Cummins (CMI)
Cummins (NYSE:CMI) produces and markets power solutions, such as engines, generators, components, and services. Their customer end-markets are transportation, industrial, marine, and mining. The company’s exposure to power space led it to invest heavily in hydrogen fuel cell technology. Further, it aims to become a dominant player in the emerging hydrogen economy.
CMI is generating more than $2 billion annually in net income since 2018. Cummins’ strategy has been to make strategic acquisitions and partnerships to gain market share. As an example, in late 2019, the company acquired Hydrogenics. And the following year, Cummins formed a joint venture with NPROXX to develop hydrogen storage systems. Also, to create fuel cell products, CMI has formed strategic partnerships with industry players, including Air Products (NYSE:APD) and Hyundai Motor (OTCMKTS:HYMTF).
While Cummins is not a flashy hydrogen stock, it’s delivered solid financial results since the pandemic. While the stock is down 11.2% year to date (YTD), investors could benefit from a long-term hold as the company expands.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is pure-play innovator, with a billion-dollar revenue figure. It specializes in technology, and its underperforming stock price is noticeable. Bloom Energy excels in solid oxide fuel cell (SOFC) technology, an electrochemical process that generates electricity from various fuels. Some of which include natural gas, biogas, and hydrogen.
BE’s SOFC technology ultimately reduces the need for combustion. Therefore, it reduces emissions, which gives the company a competitive advantage in a market landscape criticized for fossil fuel reliance. While shares fell 48.8% YTD, Wall Street analysts project a 133.8% potential upside. That number could place potential investors in a sweet spot if they invest while shares remain trading low.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) has managed to become the largest supplier of liquid hydrogen, primarily producing fuel cells for supply chain and logistics industries. As fuel costs move upward, alternative energy sources emerge. Especially for powering industrial vehicles used in warehouses, for example, PLUG can save immense costs while reducing greenhouse gas emissions.
Already, e-commerce giants Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT) have expressed interests. And, as companies look to decrease their carbon footprint, Plug Power’s customer base could increase. Investors should definitely take advantage of Plug Power’s shares down 52.3% YTD. Thus, allocate now before the stock rebounds.
On the date of publication, Tyrik Torres did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
