Why Plug Power Stock Tumbled 30% in the First Half of 2025

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Backers of Plug Power found themselves facing substantial setbacks as the shares of this hydrogen company dropped a staggering 59% during the first five months of 2025. However, fortunes changed dramatically for these investors in June, as Plug Power experienced a remarkable surge, rising an impressive 69%.

Despite ending the initial half of 2025 with a 30% decrease, as reported by S&P Global Market Intelligence, the question arises: Is the stock’s recent surge an indication of a much-anticipated reversal in its fortunes?

Plug Power’s tumultuous 2025

In early 2025, Plug Power seemed to be experiencing a change in fortune. This hydrogen producer and fuel-cell manufacturer landed a significant 3 gigawatt (GW) electrolyzer supply contract with Allied Green Ammonia in Australia. Additionally, they were granted a $1.66 billion loan guarantee by the Department of Energy this year. For a company grappling with a severe cash shortage and questions about its continued operation, this is a substantial financial boost.

The initial joy, unfortunately, didn’t last long. On his first day in office, President Donald Trump took action by issuing an executive order that stopped the distribution of federal funds, totaling billions of dollars, for green hydrogen projects that had been approved under the Biden administration. This decision potentially jeopardized Plug Power’s loan, leading the company to implement a series of cost-reduction strategies in the ensuing weeks.

In the year 2024, Plug Power saw a significant drop in its revenue, with the figure approaching half of what it was previously. Moreover, the company reported an alarmingly high gross margin of -78%, which translated to a massive net loss of $2.1 billion for the entire year.

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Nevertheless, it was Plug Power’s significantly improved first-quarter results that attracted investor interest, leading to a reversal in the stock’s trend. The company reported a 11% increase in sales compared to the previous year, its gross loss was more than halved, and its rate of cash burn decreased as well.

It was a significant month for June, as Plug Power’s stock secured another 2 Gigawatt deal from Allied Green, with CFO Paul Middleton personally investing in the company – demonstrating his faith in Plug Power’s future. The hydrogen stock surged more than 65% during June and has maintained positive growth thus far in this month.

Is it time to buy Plug Power stock?

Despite facing numerous obstacles, what stands out about Plug Power is its consistent success in securing business deals. In early July, the company entered into an agreement with a yet-unnamed U.S. industrial gas corporation, with the purpose of purchasing liquid hydrogen until 2030. Although Plug Power is increasing its own hydrogen production capabilities, it remains heavily dependent on external purchases. The company anticipates that this deal will result in substantial cost savings and an increase in cash flow.

Just days after President Trump signed the One Big Beautiful Bill Act into law on Independence Day, a new hydrogen deal has emerged. While the fresh legislation eliminates several key incentives that the green hydrogen sector had previously depended upon, it plans to gradually phase out tax credits for projects starting from December 31, 2027. Previous versions of the bill aimed to eliminate these tax credits by the end of this year.

There appears to be potential in Plug Power’s recent hydrogen agreement, as it could potentially reduce expenses for the company. Nevertheless, I would advise waiting on investment until Plug Power’s sales, profit margins, and cash flow all indicate an upward trajectory. Unfortunately, it’s hard to predict exactly when that might happen. Throughout this period, expect the stock of Plug Power to remain quite volatile, with a strong possibility of being delisted.

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2025-07-18 01:51