Maximum course potential reached by Nel, Plug Power, and company, at approximately 370% growth rate.
The hydrogen industry is at a critical juncture in 2025, with strong quarterly results observed in companies like Nel ASA and Plug Power, but faced with profitability challenges and scaling hurdles.
Plug Power
Plug Power reported a 11% revenue growth in Q1 2025 to $134 million, driven by electrolysers, material handling, and cryogenic technology. The company significantly improved gross margins through cost cuts and supply chain efficiency, but still posted a loss per share of $0.21, below analyst expectations.
Operating in three segments - material handling, electrolyser manufacturing, and hydrogen supply - Plug Power secured a $1.66 billion government loan guarantee for up to six green hydrogen plants in the US, aiming for 500 tons of hydrogen per day capacity by the end of 2025. The company has halved its cash burn, raised $280 million in share placement, and secured a $525 million credit line, holding about $300 million liquidity.
A key supply deal extends Plug’s hydrogen supply contract through 2030, immediately reducing costs and improving cash flow critical to margin expansion. Plug Power operates 275+ customer sites and plans to launch over 40 new hydrogen sites in 2025, signalling robust near-term growth expectations.
However, profitability remains the largest investor concern. Political uncertainties and tariffs on Chinese imports add to near-term risks. The question is whether Plug Power can scale fast enough to become profitable before capital constraints emerge.
Nel ASA
Nel ASA's order pipeline surpassed 4 GW, reflecting strong sales and backlog despite delays. The company is scaling up production with its Herøya gigafactory reaching 1 GW annual capacity and shipping modular electrolyzer units for large-scale green hydrogen projects globally.
Nel secured $29 million in U.S. tax credits for a Michigan plant and a €135 million EU grant, supporting expansion plans. However, the company has slowed build-out to conserve capital pending finalized U.S. hydrogen tax credit rules. Nel’s business is a scale-up play; success depends on reducing production costs below $250/kW to push green hydrogen costs near $2/kg, making it competitive for industrial and seasonal energy storage applications.
Other Hydrogen Stocks and Industry Trends
Alternative energy hydrogen producers, including Pure Hydrogen, are gaining renewed investor interest as defense stocks taper off. The hydrogen sector is at a crossroads with a mix of political, financial, and operational challenges, but significant government support (e.g., US subsidies, EU innovation grants) is propelling growth.
The transition to green hydrogen depends heavily on cost reduction, scaling electrolyzer production, and securing stable hydrogen supply partnerships.
Future Prospects
In the near-term, growth is driven by expanded hydrogen production capacity, strategic partnerships, and government funding. Mid to long-term, profitability remains uncertain; companies must master large-scale cost reductions and operational efficiencies to capitalize on the expanding market.
Investor considerations should focus on whether companies can transition from loss-making to sustainable profits while scaling operations to meet increasing hydrogen demand driven by energy transition and decarbonization policies.
Investment Options
Investors interested in the broader hydrogen market can consider Industrie De Nora, a profitable company (P/E ratio of 13) in the hydrogen sector. Another investment method is the Euro Hydrogen Maxx Future Certificate, which offers up to 370% upside potential in hydrogen stocks, according to its own statement. However, no information is provided about the potential downside for the Euro Hydrogen Maxx Future Certificate.
The price of the Euro Hydrogen Maxx Future Certificate is derived from an index developed by Börsenmedien AG, which holds the rights to the index and has a cooperation agreement with the issuer of the Euro Hydrogen Maxx Future Certificate, receiving remuneration from the issuer. Börsenmedien AG also has a license agreement with the issuer of the Euro Hydrogen Maxx Future Certificate.
Despite the challenges, the hydrogen sector offers potential for those willing to take calculated risks or bet on profitable players. The sector is currently a market of hope, despite a smaller total addressable market than initially projected in 2021.
Technology plays a crucial role in Plug Power's growth, as the company's revenue growth in Q1 2025 was driven by electrolysers, material handling, and cryogenic technology. Meanwhile, Nel ASA is scaling up production with its Herøya gigafactory, showcasing the significance of technology advancements in the hydrogen industry.
Financing is essential for the hydrogen sector as it faces numerous challenges, including profitability and scaling hurdles. Both Plug Power and Nel ASA have secured significant funding, but the question remains whether these companies can utilize this investment to master large-scale cost reductions, ensuring a profitable future in the expanding hydrogen market.
