Fuel cell pioneer Plug Power (NASDAQ:PLUG) seeks to function as an integral part of the hydrogen economy of the future. PLUG stock is a pure play in this niche market, and the company is well known among traders seeking to cash in on the clean-hydrogen, zero-emission fuel-cell economy.
It hasn’t always been an easy ride for PLUG stock holders. It’s no secret that the share price has declined sharply in the past. On the other hand, patient shareholders have enjoyed robust gains in 2020 so far, even amid a global pandemic.
Even in a solid year, though, PLUG shareholders have had to cope with wild bouts of volatility along the way. There’s been no shortage of news developments for Plug Power, but it’s often difficult to predict how the market will react in the short term.
The best approach is to consider whether Plug Power is going down the right path and position yourself accordingly. Recent developments, in my humble opinion, tend to indicate that the company is diligently and effectively preparing for a clean-energy economy.
A Closer Look at PLUG Stock
If you can’t handle sharp moves in both directions, then PLUG stock definitely isn’t your cup of tea. You’d be better off owning shares of a more established company with a bigger market capitalization.
Just the past couple of months should give you an idea of how wiggly and wobbly PLUG stock can be. In August and September, PLUG has been bouncing around between $11 and $14. It’s hard to tell who will win in the tug-of-war between the bulls and the bears.
To look at it from another angle, PLUG stock’s 52-week range is from $2.32 to $14.35. Granted, there’s been the onset of the novel coronavirus to contend with during the past 52 weeks. Even with that, though, the range is undeniably wide.
As a result, I recommend only taking a small position if you want to invest in PLUG stock. There’s no need to bet the farm on PLUG even if you’re strongly bullish on hydrogen fuel cell technology.
Aggressively Going Green
Without a doubt, fans of Plug Power should appreciate the company’s efforts to promote clean, green energy. In this vein, Plug Power just announced a value-added partnership with wind and solar power facilities operator Apex Clean Energy.
With Apex, Plug Power plans to develop a green hydrogen network that leverages wind power. This signifies a milestone event as Plug Power strives to achieve 50% green hydrogen sourcing by 2024.
The Hydrogen Council, with analytical support from McKinsey, envisions “a market for hydrogen and hydrogen technologies with revenues of more than $2.5 trillion per year, and jobs for more than 30 million people
The collaboration between Plug Power and Apex is a quantum leap forward in pursuit of this lucrative market. And, in the words of Apex Clean Energy President and CEO Mark Goodwin, the partnership with Plug Power marks a “significant step towards achieving a carbon-free future.”
Steady March Towards a Renewable Future
In order to achieve its ambitious objectives, Plug Power will need to procure green energy on a large scale. Fortunately, the company will have some help in this endeavor.
Thus, Plug Power has selected Brookfield Renewable Partners (NYSE:BEP) to supply renewable electricity from Brookfield’s energy portfolio. Through this partnership, Plug Power expects to be able to Plug Power’s produce roughly 10 tons of 100% green liquid hydrogen on a daily basis.
As Brookfield Renewable U.S. Chief Executive Officer Mitch Davidson points out, his company brings a “7,300-megawatt portfolio of hydropower, wind, solar and storage facilities located in 34 states across the U.S.” to the table in this game-changing deal.
With Brookfield providing the power, there’s really nothing standing in the way of Plug Power in its quest to provide the world with ultra-clean hydrogen-based energy solutions.
The Bottom Line
Plug Power isn’t trying to dominate the green hydrogen economy by itself. That’s why the company is engaging in value-added strategic partnerships.
Fans of Plug Power and of the green energy revolution should therefore stay the course with PLUG stock. After all, some volatility is par for the course when a company is literally trying to change the world.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.