Shares of Plug Power Inc. (NASDAQ:PLUG) surged 7.9% to $2.05 during Thursday afternoon trading, snapping a six-session losing streak. The gain came amid a broad rally in fuel cell stocks, with Bloom Energy Corp. (NYSE:BE) and FuelCell Energy Inc. (NASDAQ:FCEL) both soaring more than 25%.
Despite the uptick, Plug Power recovered only 40.5% of its prior dollar loss, still trading 9.7% below its July 21 close of $2.27. The stock had fallen 16.3% over the previous six sessions, losing $0.37 per share.
Bloom Energy's AI-driven results fuel sector optimism
Bloom Energy reported second-quarter revenue of $1.065 billion, a 165.5% year-over-year increase, with GAAP gross margin of 33.4% and operating cash flow of $226.4 million. CEO KR Sridhar highlighted the company’s role in AI power demand, stating, “Bloom is now a standard for AI onsite power.”
Mizuho upgraded Bloom from Neutral to Outperform with a $242 price target (down from $285), citing its “time-to-power advantage” and financing capacity exceeding $27 billion.
Bloom’s market capitalization reached $66.47 billion, roughly 23 times Plug’s $2.85 billion, reflecting its positive margins and cash generation. The valuation gap underscores the market’s preference for companies with proven operational results.
Plug Power still faces liquidity and margin challenges
Plug Power’s first-quarter revenue rose 22% to $163.5 million, while GAAP gross margin improved from -55% to -13%. The adjusted loss narrowed to $0.08 per share. CEO Jose Luis Crespo said the quarter positions the company to achieve positive EBITDAS (earnings before interest, taxes, depreciation, amortization, and share-based expense) in the fourth quarter.
However, liquidity remains a key concern. Plug reported preliminary unrestricted cash of about $162 million as of June 30, roughly 1.08 times its first-quarter operating cash usage of $150 million. Pro-forma liquidity, including anticipated proceeds from a Texas asset sale, totals over $242 million, but this excludes fees and closing adjustments.
The Texas deal, expected to close by July 31, includes a $50 million payment at closing and up to $26.5 million in contingent payments. Risks include regulatory approvals in New York and potential additional capital needs if operating cash outflows persist.
Market performance and sector divergence
Thursday’s rally was uneven within the fuel cell sector. Bloom outperformed Plug by 17.6 percentage points, while FuelCell was ahead by 20.6 points. Ballard Power Systems (NASDAQ:BLDP) rose 8.8% to $2.72. The Invesco QQQ Trust (NASDAQ:QQQ) gained 3.1% to $682.15.
While the sector buzz lifted Plug, the company’s operational results still lag behind Bloom’s. Investors will be watching for Plug’s quarterly earnings, improved cash conversion, and concrete data-center contracts to validate its turnaround strategy.
