Plug Power's stock has been swept up in the AI mania. Can it continue?

By Tomi Kilgore

The hydrogen producer's stock just had its best week in a decade, as growth in nuclear power is seen boosting production

Plug Power's stock has nearly tripled over the past month.

Plug Power's stock is extending its recent surge as investors look to how a hydrogen producer can be an artificial-intelligence play.

Shares of Plug Power Inc. have blasted higher in recent weeks, as investors have caught on to how the hydrogen producer and fuel-cell company can be part of the widening reach for artificial-intelligence plays.

The stock (PLUG) has nearly tripled over the past month, but H.C. Wainwright & Co. analyst Amit Dayal spells out why he believes investor interest has exploded and how the stock can still rally a lot higher.

The reason, Dayal said, is basically that higher electricity prices and the expected growth in nuclear power - fueled by the massive increase in the need for electricity as AI infrastructure gets built out and by general industrial electrification - will create an smoother path for green hydrogen, which is Plug Power's specialty.

Plug shares climbed 8.4% on Monday, after rocketing 60.8% last week, their best weekly performance since March 2014. Since Sept. 9, when it closed at a six-week low, the stock has soared 185%.

The stock, which closed at its highest since Feb. 14, 2024, was trading below $1 as recently as four months ago.

Dayal believes that if the price of electricity continues to climb as demand increases, then green hydrogen, which can be used to power heavy industries and ground transportation, will become more price competitive and the case for adoption will get stronger.

"We believe the positive sentiment shift towards nuclear power - especially small and modular reactors that could potentially be deployed off-grid - may benefit hydrogen adoption as nuclear rollout gets underway in the next four to six years," Dayal wrote in a note to clients.

He raised his stock-price target to $7 from $3, with the new target implying about 67% upside from current levels, while keeping his rating at buy. The new target is also high enough to make Dayal the most bullish of the 25 analysts surveyed by FactSet who cover Plug.

He also dug into the symbiotic relationship between nuclear power and hydrogen production.

First, he noted, nuclear power can provide stable, continued and carbon-free power for electrolysis, which is when electricity is used to break up water molecules into hydrogen and oxygen, making hydrogen production cheaper and more predictable.

Second, there is also the idea that small module reactors - smaller nuclear fission reactors that can be built in factories and transported - could provide an alternative way for Plug to secure high-temperature steam for hydrogen production.

Third, Dayal said that hydrogen electrolyzers, which create hydrogen through electrolysis, could be paired with nuclear power to improve grid balancing and store power.

"We believe these synergies may provide a low-cost path for decarbonizing heavy industry relative to options available today," he wrote.

Besides the fundamental reasons for stock's recent rally, Dayal pointed out that bearish bets on the stock are relatively high, meaning there are still a lot of people willing to bet that the stock price will fall.

Short interest as a percentage of the public float, or shares available for the public to freely trade, is 32.5%. In comparison, Opendoor Technologies Inc. (OPEN), which has recently been called a meme stock, has a short-interest percent of float of 25.8%.

High short interest is often seen as a contrarian indicator after a stock starts trending higher. The idea being, for those who have already sold the stock short, the next trade would be to buy. As the stock price continues to rise, it is more likely the shorts will cover to either book profits or cut losses.

"If the company does beat consensus expectations consistently over the next few quarters, we believe the 30%-plus short interest [as of Sept. 15] could provide basis for a continued rally in the stock," Dayal wrote.

Plug is not projected to release its next quarterly earnings report until the beginning of November. But those looking for a bout of short covering should keep in mind that the company has reported quarterly losses per share that were wider than the FactSet consensus for the past 20 quarters.

Plug's stock has run up 97% in 2025, while the Global X Hydrogen exchange-traded fund HYDR has rallied 87% and the S&P 500 SPX has advanced 14.7%.

-Tomi Kilgore

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10-06-25 1958ET