Plug Power set to surge as investors back a next generation hydrogen fuelled economy

Plug Power Inc. (NASDAQ:PLUG) is set surge for the second day in a row, as investors rally behind the largest hydrogen cell manufacturer of its kind. PLUG announced it has completed its acquisitions of United Hydrogen and Giner ELX. The company has made its ambitions clear, with the end goal producing zero carbon hydrogen solutions. The company has lifted it’s 2024 revenue goal by 20%, to $1.2 Billion. Hydrogen fuelled energy will play a powerful role in the complete transition to clean energy, powering the next generation economy.

Table of Contents 
1. Plug power acquisition summary
2. Can the rally last?
3. Whats in it for long term shareholders?

“Every decision we make is with an eye to the future, not the past. This closely aligns with the efforts that companies like United Hydrogen and Giner ELX have made to secure broad participation in the hydrogen economy, and to achieve the objectives of a clean environment and reduced dependence on foreign oil. We welcome these organizations into the Plug Power family where, as a team, we can accelerate the adoption of low carbon and zero carbon hydrogen on a global scale.”

Acquisition announcement; Plug Power CEO, Andy Marsh 23/6/2020

NASDAQ: PLUG set to surge for the second day in a row – will this rally last?

PLUG is set to open 15% higher this morning according to pre-market movements. Investors rallied yesterday after the announcement of the completed acquisition alongside improved financial forecasts. However, gains may also be explained by speculators looking to turn a quick profit. Some investors have a tendancy to flock to stocks set to rise 10% or greater, before selling off a day or two later. As PLUG continues to find short term investor backing, the likelihood of the stock facing a strong correction increases.

Whats in it for Long term shareholders?

For long term shareholders, the reward for investing in the largest hydrogen cell manufacturer is uncanny. At this point in time, hydrogen power will not come into the “mainstream” for another 15-20 years. I have absolutely no doubt, as PLUG continues to vertically integrate more hydrogen businesses – the interest of investors will continue to rise. At this point in time, there is no company producing hydrogen cells at this magnitude. Therefore, some may link the assumption that if Hydrogen becomes our preferred source of energy, PLUG will benefit the most at a corporate level.

With time being one of the biggest factors in the long term success of PLUG, investors may ask the question : will I be prepared to hold for a significant period of time?

A good example of the risk/reward scenario at this scale would be Tesla. Many bears believed Tesla could crash at $200 as the company was seen to be heavily overvalued at the time. But learning from history, innovative business models can outweigh the business fundamentals. In the Tesla case, the long term risk translated into significant reward.

This begs the question: Will PLUG be the “next greatest” long term investment?

The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

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