In this article, we discuss 10 best hydrogen and fuel cell stocks to buy in 2022.
The hydrogen and fuel cell market has come under increased media spotlight in the past few years as policymakers around the globe use energy transition as an important stepping stone on the road to zero emissions. Hydrogen-powered battery packs or fuel cells, which produce electricity and emit water and heat, are starting to dominate discussions around possible alternatives to fossil fuels. According to a report by research firm Fortune Business Insights, the global hydrogen generation market will reach $220 billion in value by 2028.
This represents a compound annual growth rate of 5.6% for the hydrogen sector that was valued at around $150 billion in 2021. Some of the best hydrogen and fuel cell stocks that investors might want to consider profiting from this boom include Linde plc (NYSE:LIN), Shell plc (NYSE:SHEL), and DuPont de Nemours, Inc. (NYSE:DD). Some of the advantages that hydrogen tech offers over other green power sources are that fuel cells can use a wide range of fuels and feedstocks and can provide power for both large and small systems.
Hydrogen and fuel cell companies around the world are investing heavily in research and development to improve the durability of the new technology. The United States Department of Energy has set ultimate targets for fuel cell system lifetime under realistic operating conditions at 8,000 hours for light-duty vehicles, 30,000 hours for heavy-duty trucks, and 80,000 hours for distributed power systems. There is still a lot of work to be done to make the technology more mainstream around the globe.
For example, automakers have struggled to convince consumers of the potential of hydrogen-powered vehicles. However, the trucking industry is rapidly embracing the new technology. Andreas Gorbach, the technical chief of Daimler Trucks, said at IAA Transportation 2022 that even though no battery chemistry will ever outperform how much energy engineers can store with hydrogen, there were still major obstacles to overcome before hydrogen fuel cell trucks could start to replace diesel vehicles. He reiterated:
“If you take the elements with the biggest difference in electrochemical that gives you the highest energy, the highest voltage and the highest potential energy density cell, you would never come even close to the hydrogen. There are not elements that can compete with hydrogen.”
Our Methodology
The companies that operate in the hydrogen and fuel cell sectors were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the second quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Photo by Tommy Krombacher on Unsplash
Best Hydrogen and Fuel Cell Stocks to Buy in 2022
10. Fusion Fuel Green PLC (NASDAQ:HTOO)
Number of Hedge Fund Holders: 4
Fusion Fuel Green PLC (NASDAQ:HTOO) focuses on the production of hydrogen in Portugal, Southern Europe, and Morocco. It is one of the top hydrogen stocks to invest in. Fusion Fuel Green PLC (NASDAQ:HTOO) recently entered into a technology sales pact with KEME Energy to supply its solar-to-hydrogen system for a 1.22 MW green hydrogen project located in Sines, Portugal. Under the €5 million contract, Fusion Fuel Green PLC (NASDAQ:HTOO) will supply its solar-to-hydrogen systems for a 3.2 MW green hydrogen project located in Andalucía, Spain.
On September 22, RBC Capital analyst Erwan Kerouredan initiated coverage of Fusion Fuel Green PLC (NASDAQ:HTOO) stock with a Sector Perform rating and a $7 price target, highlighting that green hydrogen demand is expected to grow substantially in the next decade and the company’s integrated product offering and strategic location near cheap renewable power and green hydrogen demand could make for a compelling investment case.
At the end of the second quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $15 million in Fusion Fuel Green PLC (NASDAQ:HTOO), compared to 4 in the previous quarter worth $20.9 million.
Just like Linde plc (NYSE:LIN), Shell plc (NYSE:SHEL), and DuPont de Nemours, Inc. (NYSE:DD), Fusion Fuel Green PLC (NASDAQ:HTOO) is one of the best hydrogen stocks to buy according to hedge funds.
9. Westport Fuel Systems Inc. (NASDAQ:WPRT)
Number of Hedge Fund Holders: 11
Westport Fuel Systems Inc. (NASDAQ:WPRT) engages in the engineering, manufacturing, and supplying alternative fuel systems and components for use in transportation applications worldwide. It is one of the best hydrogen stocks to invest in. Westport Fuel Systems Inc. (NASDAQ:WPRT) shares have jumped recently after the company announced that it was awarded a program to develop and supply liquefied petroleum gas systems for Euro 6 vehicle applications for an unnamed global original equipment manufacturer. Westport Fuel Systems Inc. (NASDAQ:WPRT) is also developing fuel systems for future regulations, including proposed Euro 7 standards.
On August 8, Westport Fuel Systems Inc. (NASDAQ:WPRT) posted earnings for the second quarter of 2022, reporting a revenue of $80 million, up more than 1% compared to the revenue over the same period last year and beating estimates by $3.45 million.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Westport Fuel Systems Inc. (NASDAQ:WPRT), with 2.6 million shares worth more than $2.7 billion.
8. Ballard Power Systems Inc. (NASDAQ:BLDP)
Number of Hedge Fund Holders: 12
Ballard Power Systems Inc. (NASDAQ:BLDP) provides atmospheric gasses, process and specialty gasses, equipment, and services worldwide. It is one of the premier hydrogen stocks to invest in. Ballard Power Systems Inc. (NASDAQ:BLDP) recently announced plans to establish a new China headquarters, R&D center, and membrane electrode assembly (MEA) manufacturing facility. The company will spend $130 million over the next three years to establish its new site at the Jiading Hydrogen Port in Shanghai.
On October 04, Citi analyst PJ Juvekar kept a Neutral rating on Ballard Power Systems Inc. (NASDAQ:BLDP) stock and lowered the price target to $7.50 from $10, denoting that with rising rates across the globe, certain end markets like construction and housing are slowing down, while others like auto manufacturing and aerospace now seem closer to a trough.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Millennium Management is a leading shareholder in Ballard Power Systems Inc. (NASDAQ:BLDP), with 3.35 million shares worth more than $21 million.
At the end of the second quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $45 million in Ballard Power Systems Inc. (NASDAQ:BLDP), compared to 15 in the preceding quarter worth $68 million.
7. Bloom Energy Corporation (NYSE:BE)
Number of Hedge Fund Holders: 24
Bloom Energy Corporation (NYSE:BE) designs, manufactures, sells, and installs solid-oxide fuel cell systems for on-site power generation in the United States and internationally. It is one of the premier hydrogen stocks to invest in. Bloom Energy Corporation (NYSE:BE) recently priced an underwritten public offering of 13 million shares of Class A common stock at a public offering price of $26.00 per share for expected gross proceeds of $338 million.
On August 25, Bank of America analyst Julien Dumoulin-Smith resumed coverage of Bloom Energy Corporation (NYSE:BE) stock with a Buy rating with a price target of $34, identifying that price target was unchanged following the 15 million share equity raise and arguing that many opportunities were not reflected in the current share price.
Among the hedge funds being tracked by Insider Monkey, Minneapolis-based investment firm Whitebox Advisors is a leading shareholder in Bloom Energy Corporation (NYSE:BE), with 35.7 million shares worth more than $43.9 billion.
At the end of the second quarter of 2022, 24 hedge funds in the database of Insider Monkey held stakes worth $73 million in Bloom Energy Corporation (NYSE:BE), compared to 29 in the preceding quarter worth $124 million.
6. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders: 26
Plug Power Inc. (NASDAQ:PLUG) delivers end-to-end clean hydrogen and zero-emissions fuel cell solutions for various sectors. It is one of the most prominent hydrogen stocks to invest in. Plug Power Inc. (NASDAQ:PLUG) shares have risen after the firm agreed to supply liquid green hydrogen to Amazon starting in 2025 to help decarbonize the latter’s operations. As part of the deal, Plug Power Inc. (NASDAQ:PLUG) granted Amazon a warrant to acquire up to 16 million common shares, with an exercise price for the first 9 million warrant shares of $22.98 per share.
On October 04, Citi analyst P.J. Juvekar kept a Buy rating on Plug Power Inc. (NASDAQ:PLUG) stock and lowered the price target to $28 from $36, underlining that Plug Power is bringing on 70 TPD of green hydrogen plants by the end of this year, with a target of 500 TPD by 2025.
At the end of the second quarter of 2022, 26 hedge funds in the database of Insider Monkey held stakes worth $259 million in Plug Power Inc. (NASDAQ:PLUG), compared to 33 in the preceding quarter worth $509.8 million.
In addition to Linde plc (NYSE:LIN), Shell plc (NYSE:SHEL), and DuPont de Nemours, Inc. (NYSE:DD), Plug Power Inc. (NASDAQ:PLUG) is one of the best hydrogen stocks to buy according to hedge funds.
5. Air Products and Chemicals, Inc. (NYSE:APD)
Number of Hedge Fund Holders: 33
Air Product and Chemicals, Inc. (NYSE:APD) provides atmospheric gasses, process and specialty gasses, equipment, and services worldwide. It is one of the top hydrogen stocks to invest in. Air Products and Chemicals, Inc. (NYSE:APD) recently announced that it plans to spend $500 million to build, own, and operate a 35 metric tons per day facility to produce green liquid hydrogen at a greenfield site in Massena, New York, as well as liquid hydrogen distribution and dispensing operations.
On October 04, investment advisory Citi kept a Neutral rating on Air Products and Chemicals, Inc. (NYSE:APD) stock and lowered price target to $251 from $272. Analyst PJ Juvekar issued the ratings update.
At the end of the second quarter of 2022, 33 hedge funds in the database of Insider Monkey held stakes worth $375 million in Air Product and Chemicals, Inc. (NYSE:APD), compared to 39 in the previous quarter worth $859 million.
In its Q2 2022 investor letter, Madison Funds, an asset management firm, highlighted a few stocks and Air Product and Chemicals, Inc. (NYSE:APD) was one of them. Here is what the fund said:
“This quarter we are highlighting Air Products and Chemicals, Inc. (NYSE:APD) as a relative yield example in the Materials sector. APD is a leading global industrial gas supply company and is the largest supplier of hydrogen and helium in the world. It has a sustainable competitive advantage due to long-term customer relationships and contracts, high customer switching costs, and the mission critical nature of its products. Industrial gases are a relatively small fraction of customers’ overall costs but are crucial to ensure uninterrupted production.
Our thesis on APD is that it appears well-positioned for consistent double-digit growth due to a large multi-year capital allocation plan, and the need for accelerating capital expenditures by its customers. It has a $25 billion backlog driven by traditional gas investments along with new growth opportunities like gasification, green hydrogen, and carbon capture. APD’s gasification technologies help improve energy efficiency and independence, which is a key focus for its customers. The company also has a strong management team with a record of expanding margins and exemplary capital allocation (…read more)
4. Cummins Inc. (NYSE:CMI)
Number of Hedge Fund Holders: 36
Cummins Inc. (NYSE:CMI) designs, manufactures, distributes, and services diesel and natural gas engines, electric, and hybrid powertrains, as well as related components worldwide. It is one of the best hydrogen stocks to invest in. Cummins Inc. (NYSE:CMI) recently announced that it had been selected by Atura Power to design and manufacture a 20MW electrolyzer system for its Niagara Hydrogen Centre in Niagara Falls, Ontario. The proton exchange membrane electrolysis system, manufactured at the Mississauga facility of Cummins Inc. (NYSE:CMI), will become the center piece of Atura Power’s Niagara Hydrogen Centre.
On August 18, JPMorgan analyst Tami Zakaria reinstated coverage of Cummins Inc. (NYSE:CMI) stock with a Neutral rating and lowered the price target to $245 from $264, remarking that Cummins Inc. (NYSE:CMI) will be in investment mode over the near and medium term as it develops zero emission solutions for commercial vehicles.
At the end of the second quarter of 2022, 36 hedge funds in the database of Insider Monkey held stakes worth $462.8 million in Cummins Inc. (NYSE:CMI), compared to 35 in the preceding quarter worth $584 million.
3. Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 39
Shell plc (NYSE:SHEL) operates as an energy and petrochemical company worldwide. It is one of the premier hydrogen stocks to invest in. Shell plc (NYSE:SHEL) recently made its first power sector acquisition in Africa with the purchase of Nigerian renewable energy provider Daystar Power for an undisclosed sum, per news publication Financial Times. The move is part of a larger plan as the firm expands its global renewables portfolio.
On October 07, Cowen analyst Jason Gabelman maintained an Outperform rating on Shell plc (NYSE:SHEL) stock with a $60 price target, stressing that company targets were unchanged despite inclusion of growth previously accounted for in another segment while capex was higher than expected.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Fisher Asset Management is a leading shareholder in Shell plc (NYSE:SHEL), with 20 million shares worth more than $1 billion.
In its Q1 2022 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and Shell plc (NYSE:SHEL) was one of them. Here is what the fund said:
“While risks of unforeseen consequences arising from the Ukraine conflict are high, on this front we are cautiously optimistic that China will work hard to maintain its neutrality in a credible way, as it is a huge beneficiary of trade with the rest of the world, especially the rich developed nations. We think it likely that China, along with India, will continue to buy oil and gas from Russia (just as Europe, at least for now, plans to keep its gas pipelines open), and do not expect that fact to alter China’s trade relations with the West much. Nevertheless, we must contemplate that our optimism is misplaced on the importance of membership in the global network of exchange. If our central and optimistic case—admittedly an educated guess—is wrong, then we’d need to greatly modify our views of which companies in our opportunity set will face new barriers to profitable growth, and which might stand to benefit, relatively, from a further receding of globalization. (Global trade, after all, has never matched the peak share of GDP it reached in 2008, before the Global Financial Crisis.) We’d expect such a world to be less efficient, as the cold logic of comparative advantage is demoted as a determinant of which goods or services are produced and where. That would lead to a less prosperous world, since exploiting comparative advantage is a cornerstone of wealth creation. If regional blocs began to raise limits on the movement of capital as well as goods, we’d need to parse which of our multi-national companies were at risk of declining sales from increasingly hostile, siloed countries. Shell plc (NYSE:SHEL) has found its Siberian oil and gas joint venture assets stranded by the combination of sanctions and the public opprobrium of Russia’s actions.”
2. DuPont de Nemours, Inc. (NYSE:DD)
Number of Hedge Fund Holders: 44
DuPont de Nemorus, Inc. (NYSE:DD) provides technology-based materials and solutions. It is one of the elite hydrogen stocks to invest in. DuPont de Nemours, Inc. (NYSE:DD) delivered a big earnings beat for Q2 2022, with adjusted EPS up 11% to $0.88 per share. On October 04, Citi analyst PJ Juvekar kept a Buy rating on DuPont de Nemours, Inc. (NYSE:DD) stock and lowered price target to $67 from $75.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm 40 North Management is a leading shareholder in DuPont de Nemorus, Inc. (NYSE:DD), with 5.88 million shares worth more than $326.8 million.
1. Linde plc (NYSE:LIN)
Number of Hedge Fund Holders: 48
Linde plc (NYSE:LIN) operates as an industrial gas and engineering company. It is one of the most prominent hydrogen stocks to invest in. Linde plc (NYSE:LIN) plans to build a 35MW PEM electrolyzer to produce green hydrogen in Niagara Falls, New York, the chemical company recently announced. The new plant, the largest electrolyzer installed by Linde plc (NYSE:LIN) globally, will more than double the company’s green liquid hydrogen production capacity in the US. Expected to start up by 2025, the facility will use hydroelectric power to produce green liquid hydrogen.
On October 04, Citi analyst PJ Juvekar kept a Buy rating on the Linde plc (NYSE:LIN) stock and lowered the price target to $322 from $346.
At the end of the second quarter of 2022, 48 hedge funds in the database of Insider Monkey held stakes worth $3.2 billion in Linde plc (NYSE:LIN), compared to 54 in the preceding quarter worth $4.8 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Linde plc (NYSE:LIN) was one of them. Here is what the fund said:
“The replacement of demand for Russian gas with green hydrogen positions Linde (NYSE:LIN) well. Green hydrogen, made by using renewable energy to split water into its basic elements, hydrogen and oxygen, and subsequently cleanly burn the hydrogen as fuel, is seen as key to lowering emissions in hard-to-decarbonize industries such as steel and cement, as well as transport. In 2021 Linde announced a long-term agreement to provide European semiconductor maker Infineon (OTCQX:IFNNY) with onsite production and storage of green hydrogen for the company’s site in Villach, Austria. Securing a clean, domestic source of energy for semiconductor manufacturing appears strategic today amid heightened concerns of reliable supply from Taiwan.”
You can also take a peek at 10 Most Valuable Internet Companies in 2000 vs. Today and 10 Best EV Battery Stocks to Buy in Late 2022.
Follow Insider Monkey on Twitter
Suggested Articles:
- 10 Best Fundamental Stocks To Buy
- 10 Best Lumber Stocks To Invest In
- 11 Best Motley Fool Stocks To Buy Now
Disclosure. None. 10 Best Hydrogen and Fuel Cell Stocks to Buy in 2022 is originally published on Insider Monkey.
