Plug Power’s stock price has collapsed more than 95% from its all-time highs, is this an opportunity to get in on the cheap or a sign of risk?
Plug Power (PLUG -1.74%) isn’t a penny stock, but it isn’t far off, with a stock price hovering around $1.50 right now. Is it worth jumping in while the price is below $2 and over 95% below the all-time high price it hit around the turn of the century? There are exciting things happening with the business, but there are also things you need to be worried about.
What does Plug Power do?
Plug Power bills itself as “the industry leader building the world’s end-to-end green hydrogen system.” The business touches hydrogen production, storage, delivery, and energy generation from the fuel. The big benefit of hydrogen is that it doesn’t emit greenhouse gases. The main byproducts are heat, which is used to generate energy, and water, which is a life necessity.
Image source: Getty Images.
Ultimately, Plug Power is a clean energy business. It’s not renewable, like solar or wind power, but hydrogen has interesting applications. For example, using hydrogen to power forklifts in an enclosed space is highly desirable. Hydrogen is also attractive for things like tractor-trailers and generators. There is a place at the table for hydrogen when it comes to fulfilling the world’s energy needs.
That said, the infrastructure around carbon fuels, solar, and wind power is all more fully developed. Plug Power is still just a tiny energy business attempting to take on energy Goliaths. To put that into perspective, Plug Power had revenue of roughly $174 million in the second quarter of 2025. ExxonMobil (XOM 0.65%), an integrated oil and natural gas company, had revenue of roughly $7.1 billion in the same quarter, and Brookfield Renewable Partners (BEP 0.88%), a diversified clean energy operation, posted revenue of nearly $1.7 billion. The entirety of Plug Power’s business would be a rounding error in both cases.
Plug Power: Opportunity and risk
Being a small business isn’t the same as being a bad business. There are reasons to like the hydrogen technology that Plug Power is attempting to develop and commercialize. For example, Plug Power’s $174 million in revenue in the second quarter of 2025 was actually up 21% year over year. And the company’s electrolyzer revenue tripled year over year as it scaled up that operation (an electrolyzer basically produces hydrogen by splitting water into hydrogen and oxygen).
The company has also been working on its cost structure. In fact, gross margin improved dramatically year over year. That’s great, but there’s a problem here, too. Gross margin in the second quarter was negative 31%. That’s a huge improvement from the negative 92% in the same quarter of 2024, but it still speaks to a business that isn’t close to being profitable. The big goal for 2025 is to get to a break-even gross margin.
A quick look at any income statement will show that’s not going to be enough for Plug Power to generate positive earnings. Gross margin just looks at revenue versus the cost to generate that revenue. There are material additional costs lower down on the income statement, including research and development and general and administrative costs. Neither of these is optional and, in the case of Plug Power, R&D is vital to establishing a material hydrogen end market.
Plug Power is probably best left to aggressive types
Until Plug Power is a sustainably profitable business, most investors will be better off avoiding the stock. Sure, the low price point would mean getting in on the ground floor of a company supporting an interesting energy technology. But the fact that it is bleeding red ink, with no end in sight to the losses, suggests that it isn’t a business that will be worth the risk for any but the most aggressive of investors. And, even then, you’ll need to really believe in the hydrogen story backing Plug Power’s business.