Plug Power (PLUG) Stock Jumps 20% as New Tax Credit Rules Boost Hydrogen Energy Production

Plug Power Inc. (PLUG) saw its stock jump nearly 20% in the morning session on Monday, fueled by the U.S. Department of the Treasury's release of final rules on tax credits for clean hydrogen production under the Inflation Reduction Act (IRA).

Plug Power (NASDAQ:PLUG) stock soared nearly 20% in the morning session on Monday, as the U.S. Department of the Treasury released final rules on tax credits for clean hydrogen production under the Inflation Reduction Act (IRA). These updates are seen as a significant boost for companies like Plug Power, which are at the forefront of hydrogen energy production.

Retail Investor Sentiment and Stocktwits Poll

Retail investors on Stocktwits have expressed strong enthusiasm, with Plug Power emerging as the favorite hydrogen stock for 2025. The updated rules broaden eligibility for tax credits, allowing more producers—including those in the nuclear and natural gas sectors—to qualify for billions in incentives. This expansion is expected to reduce the high costs traditionally associated with clean hydrogen production, which is critical for scaling the sector.

On Stocktwits, the majority of investors have cast their votes for Plug Power, with over 50% of users predicting it has the most significant upside potential compared to other hydrogen companies like Bloom Energy (NYSE:BE), Nikola (NASDAQ:NKLA), and FuelCell Energy (NASDAQ:FCEL). Notably, Nikola garnered 21% of the vote, while FuelCell Energy attracted 16%, and Bloom Energy received just 8%, making it the least favored among retail investors.

The sentiment surrounding Plug Power has gone from neutral to extremely bullish, with a sharp uptick in message volume on Stocktwits, which has risen from low to high levels. Many investors on the platform believe the stock could surpass the $3 threshold and are anticipating further upside.

Struggles and Progress in 2024

Despite Monday’s rally, Plug Power faced significant challenges in 2024, with a 53% drop in stock price due to financial difficulties and the struggle to meet hydrogen supply commitments. The company has invested heavily in scaling up production, including opening a hydrogen production plant in Georgia last year. However, it continued to report losses and was unable to fully meet its supply commitments.

A $1.6 billion loan from the U.S. Department of Energy, announced in May 2024, is expected to stabilize the company’s finances and support its efforts to expand its clean hydrogen business.

Positive Developments and Customer Orders

Despite financial setbacks, Plug Power has made significant strides in fulfilling green hydrogen orders, including orders from major retailers such as Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), and Home Depot (NYSE:HD). While the company has yet to fully meet its commitments, the progress made in these areas is viewed as positive by industry watchers.

Looking Ahead: A Turning Point for Plug Power?

The updated tax credit rules are seen as a potential turning point for Plug Power. The bullish sentiment from retail investors, coupled with the company’s recent strides in green hydrogen production and customer relationships, suggests that Plug Power could be well-positioned for long-term growth, provided it can meet increasing demand and stabilize its finances. The favorable tax incentives and U.S. government support could play a crucial role in enabling the company to achieve its growth goals in the clean hydrogen space.