The theme of Hydrogen stock, including shares of US publicly traded companies selling hydrogen fuel cells, related renewable energy equipment and hydrogen gas, has seen a solid rally in recent months, rising nearly 40% since our last update in late June. The theme also continues to rise about 11% year-to-date, outperforming the broader S&P 500, which continues to fall about 11% over the same period, reports NewsTimes.
Factors that determine the theme’s recent outperformance
There are several factors that determine the theme’s recent outperformance. First, the Inflation Reduction Act, which contains about $370 billion in grants and credits for clean energy investment in the United States, was passed by the House last week and sent to the president for signature. This is the largest investment ever made in the fight against climate change and could lead to a staggering $1.2 trillion in private investment in the renewable energy space by 2035, according to Wood Mackenzie.
In addition, the Russian invasion of Ukraine and other geopolitical issues have also led to a surge in energy prices. High energy prices and uncertainty surrounding gas supplies serve as a wake-up call for energy-importing countries, particularly in Europe, and could potentially accelerate the transition to renewable energy and alternative energy sources such as hydrogen. In addition, macro factors may also be involved. US GDP has contracted in the past two quarters and US inflation cooled slightly to around 8.5% in July. This could lead the Federal Reserve to slow down with its rate hikes, potentially helping high-growth futuristic themes such as hydrogen.
However, there are also risks. While hydrogen has long-term potential for decarbonising and reducing dependence on fossil fuels, especially for heavier applications such as freight transport and manufacturing, it remains a futuristic gamble given its current high costs and lack of resources. Scale. Within our theme, Bloom Energy (NYSE: BE), a solid oxide fuel cell company, was the best performer, with its share up approximately 37% year-to-date. On the other hand, FuelCell Energy, a company that designs, manufactures and operates fuel cell plants, has been the worst performer with inventory down about 12% to date.
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Source: NewsTimes
