11 Best Hydrogen and Fuel Cell Stocks To Buy

In this article, we discuss 11 best hydrogen and fuel cell stocks to buy.

As per the International Energy Agency’s “Global Hydrogen Review 2022”, the demand for hydrogen reached 94 million tonnes in 2021, up from the pre-pandemic demand of 91 million tonnes in 2019. Majority of the higher hydrogen demand stems from traditional uses, such as refining and industrial applications. New steel projects are being declared swiftly, just one year after the successful demonstration of utilizing hydrogen in direct reduction of iron. Hydrogen fuel cell-powered trains are now running in Germany, and there are hundreds of on-going projects that are testing the use of hydrogen and hydrogen derivatives in shipping and the power sector. Hydrogen has the potential to create 3.5 GW power by 2030. IEA forecasts that hydrogen demand could skyrocket to 115 million tonnes by 2030, and about 2 million tonnes would be attributed to new applications. Around 200 million tonnes of hydrogen is required by 2030 to meet the net zero emissions goal by 2050.

According to GlobalData, a renowned data and analytics company, the global production capacity of green hydrogen exceeded 109 kilo tons per annum (ktpa) in 2022. This indicates an impressive growth of 44% when compared to 2021. In February 2023, Andres Angulo, Energy Analyst at GlobalData, said: 

“During 2022, over 393 deals related to hydrogen were closed, representing a significant increase compared to 277 deals registered in 2021. This shows an upward trend in the low-carbon hydrogen market development, which could be decisive in achieving over 111 million tons per annum (mtpa) capacity worldwide by 2030. However, the partnerships represented 66% of the deals last year, and the number of deals decreased after Q2 2022 to numbers even below those seen in the same quarter in 2021. This could have been due to the companies trying to strengthen their core business and diversify the investment risk given the global economic situation.”

Don’t Miss: Top 10 Green Hydrogen Companies in the World

Hydrogen fits seamlessly with the vision of the big oil companies, given their control and expertise over natural gas operations and a robust financial position after an extremely profitable year in 2022. Massive funding and experience in dynamic project management will allow the existing oil and gas giants to transition into hydrogen as an energy source. The most feasible plan is to manufacture portable liquid hydrogen and supply clean power to travel, logistics, steel, and chemical industries. Hydrogen is exceedingly popular in the aircraft industry, as they grapple to lower their carbon emissions and achieve net-zero carbon by 2050. CNBC cited Martha Neubauer, senior associate at AeroDynamic Advisory, who said: 

“Airbus has been looking at hydrogen for a long time and recently, within the last years, has increased that focus. Looking at both hydrogen fuel cells and hydrogen combustion.”

Some of the best hydrogen stocks to invest in include Linde plc (NYSE:LIN), DuPont de Nemours, Inc. (NYSE:DD), and Chevron Corporation (NYSE:CVX).  

Our Methodology 

We selected the following hydrogen and fuel cell stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm. 

Photo by Tommy Krombacher on Unsplash

Best Hydrogen and Fuel Cell Stocks To Buy

11. Plug Power Inc. (NASDAQ:PLUG)

Number of Hedge Fund Holders: 23

Plug Power Inc. (NASDAQ:PLUG) caters to supply chain and logistics, electric vehicles, and stationary power applications, providing clean hydrogen and fuel cell solutions. On June 7, Plug Power Inc. (NASDAQ:PLUG) announced that it will supply 8 MW of hydrogen fuel cell stationary power for the generation of clean energy, in collaboration with Energy Vault Holdings, Inc. (NYSE:NRGV). Plug Power announced this will be the biggest hydrogen powered fuel cell installation in the United States. It is one of the best hydrogen stocks to watch. 

On May 22, Piper Sandler analyst Kashy Harrison maintained a Neutral rating on Plug Power Inc. (NASDAQ:PLUG) but trimmed the firm’s price target on the shares to $8 from $10. The first quarter earnings seasons for Piper Sandler’s renewable and alternative energy coverage “was a rollercoaster” that included “high profile beats, misses, unexpected capital markets activity, and domestic content guidance,” which lends an optimistic outlook to the sector, the analyst told investors. 

According to Insider Monkey’s first quarter database, 23 hedge funds were bullish on Plug Power Inc. (NASDAQ:PLUG), compared to 25 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 5 million shares worth $59 million. 

In addition to Linde plc (NYSE:LIN), DuPont de Nemours, Inc. (NYSE:DD), and Chevron Corporation (NYSE:CVX), Plug Power Inc. (NASDAQ:PLUG) is one of the best hydrogen stocks to invest in. 

10. New Fortress Energy Inc. (NASDAQ:NFE)

Number of Hedge Fund Holders: 28

New Fortress Energy Inc. (NASDAQ:NFE) operates as an integrated energy infrastructure company that primarily uses natural gas for power generation. The company also aims to provide carbon-free power by using hydrogen instead of fossil fuels. New Fortress Energy Inc. (NASDAQ:NFE) is one of the best hydrogen stocks to invest in. 

On April 10, Deutsche Bank analyst Chris Robertson initiated coverage of New Fortress Energy Inc. (NASDAQ:NFE) with a Buy rating and a $60 price target. The analyst thinks there will be higher global demand for liquefied natural gas in the near future, which has the possibility to create “outsized investment opportunities.” 

According to Insider Monkey’s first quarter database, 28 hedge funds were bullish on New Fortress Energy Inc. (NASDAQ:NFE), compared to 43 funds in the prior quarter. Michael Novogratz’s Fortress Investment Group is the largest stakeholder of the company, with 13.4 million shares worth $394.3 million. 

9. Bloom Energy Corporation (NYSE:BE)

Number of Hedge Fund Holders: 29

Bloom Energy Corporation (NYSE:BE) designs, manufactures, commercializes, and installs solid-oxide fuel cell systems for power generation in the United States and internationally. On June 7, Bloom Energy Corporation (NYSE:BE) signed an agreement with Perenco, a UK-based hydrocarbon company, to install 2.5 MW of Bloom’s solid oxide fuel cells in England. This will mark Bloom Energy Corporation (NYSE:BE)’s entrance in the UK fuel cell market. 

On May 24, BMO Capital maintained a Market Perform rating on Bloom Energy Corporation (NYSE:BE) but lowered the firm’s price target on the shares to $18.50 from $22. According to the firm, the recent analyst day presentation showed the potential opportunities for Bloom Energy Corporation (NYSE:BE)’s primary stationary power product. BMO Capital believes that there is room for growth in this field due to the rising limitations of grid power.

According to Insider Monkey’s first quarter database, 29 hedge funds were bullish on Bloom Energy Corporation (NYSE:BE), compared to 24 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the biggest stakeholder of the company, with 2.5 million shares worth nearly $50 million. 

ClearBridge Investments made the following comment about Bloom Energy Corporation (NYSE:BE) in its Q3 2022 investor letter:

“We were active in repositioning the portfolio in the quarter as market crosswinds opened idiosyncratic opportunities, adding two new industrial companies. Bloom Energy Corporation (NYSE:BE) is an electrical equipment company that makes solid-oxide fuel cell systems for on-site power generation, serving a variety of industries. Its fuel cells convert natural gas, biogas or hydrogen into baseload (non-intermittent) electricity without combustion, so there is low or no carbon emission. We expect significant upside through its ability to support the growing hydrogen economy, with a large opportunity for this in South Korea and meaningful policy support in the U.S. via the IRA, while other markets include biogas, carbon capture and marine transportation. Its natural gas energy server business is growing in the U.S. amid higher grid reliability concerns.”

8. Cummins Inc. (NYSE:CMI)

Number of Hedge Fund Holders: 38

Cummins Inc. (NYSE:CMI) manufactures and designs diesel and natural gas engines, electric and hybrid powertrains, and related components worldwide. The company offers electrified power systems with components and subsystems, including battery, fuel cell, and hydrogen production technologies. 

On May 2, Cummins Inc. (NYSE:CMI) reported a Q1 GAAP EPS of $5.55 and a revenue of $8.45 billion, outperforming Wall Street estimates by $0.77 and $320 million, respectively. Cummins Inc. (NYSE:CMI) also distributed a $1.57 per share quarterly dividend to shareholders on June 1. 

According to Insider monkey’s first quarter database, 38 hedge funds were bullish on Cummins Inc. (NYSE:CMI), compared to 33 funds in the preceding quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 2.05 million shares worth $491.4 million.

7. BP p.l.c. (NYSE:BP)

Number of Hedge Fund Holders: 41

BP p.l.c. (NYSE:BP) is primarily involved in the production of natural gas, onshore and offshore wind power, hydrogen and carbon capture facilities, and crude oil. It is one of the top hydrogen stocks to invest in. On May 2, BP p.l.c. (NYSE:BP) declared a $0.3966 per ADS dividend, same as February’s dividend announcement. The dividend is payable on June 23, to shareholders of record on May 12. 

On May 4, Credit Suisse analyst Amy Wong maintained a Neutral rating on BP p.l.c. (NYSE:BP) and lowered the firm’s price target on the shares to 610 GBp from 630 GBp. 

According to Insider Monkey’s first quarter database, 41 hedge funds were long BP p.l.c. (NYSE:BP), compared to 37 funds in the prior quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 7 million shares worth $267.25 million. 

6. Shell plc (NYSE:SHEL)

Number of Hedge Fund Holders: 41

Shell plc (NYSE:SHEL) is an energy and petrochemical company that provides crude oil, natural gas, and natural gas liquids, in addition to producing and selling hydrogen. Shell plc (NYSE:SHEL) is one of the best hydrogen stocks to watch. On May 4, the company declared a quarterly dividend of $0.575 per ADS, in line with previous. The dividend is payable on June 26, to shareholders of record on May 19. 

On June 6, Deutsche Bank analyst James Hubbard placed a “Catalyst Call: Buy” Shell plc (NYSE:SHEL), categorizing the stock as a short-term investment idea, citing long-term attractive valuation and a strong market position, as well as a crucial role in enabling decarbonization. 

According to Insider Monkey’s first quarter database, 41 hedge funds were long Shell plc (NYSE:SHEL), compared to 40 funds in the prior quarter. Boykin Curry’s Eagle Capital Management is the biggest stakeholder of the company, with 12.8 million shares worth $737.3 million. 

Like Linde plc (NYSE:LIN), DuPont de Nemours, Inc. (NYSE:DD), and Chevron Corporation (NYSE:CVX), Shell plc (NYSE:SHEL) is one of the hydrogen stocks that smart investors are piling into. 

Artisan Global Equity Fund made the following comment about Shell plc (NYSE:SHEL) in its Q4 2022 investor letter:

“We scaled back our weighting in clean energy this quarter, which is a part of the portfolio’s environment theme, to take profits after a successful run in 2022. We did so by trimming our position in Shell plc (NYSE:SHEL), a stock we added to the portfolio in Q1 2022. As an integrated energy company, approximately one third of Shell’s revenues come from transition fuels, such as LNG, and another third comes from new energy sources such as green hydrogen. LNG is one of the cleanest fossil fuels and represents a potential bridge to the future by replacing higher carbon energy sources with lower carbon ones while renewable technologies mature. As the largest LNG supplier in the world, we believe Shell is particularly well-positioned to help Europe meet its energy needs as it looks for ways to replace imported Russian oil and gas with new sources after the embargo.”

5. Air Products and Chemicals, Inc. (NYSE:APD)

Number of Hedge Fund Holders: 48

Air Products and Chemicals, Inc. (NYSE:APD) is a provider of atmospheric gasses, process and specialty gasses, including hydrogen and liquid hydrogen. On May 18, Air Products and Chemicals, Inc. (NYSE:APD) declared a $1.75 per share quarterly dividend, in line with previous. The dividend is payable on August 14, to shareholders of record on July 3. It is one of the premier hydrogen stocks to invest in. 

On May 30, TD Cowen analyst Marc Bianchi increased the price target for Air Products and Chemicals, Inc. (NYSE:APD to $385 from $375, while maintaining an Outperform rating on the shares. The analyst cited the second quarter earnings report and guidance, as well as the recent acquisition of Uzbekneftegaz’s Industrial Gas facility for the target raise.

According to Insider Monkey’s first quarter database, 48 hedge funds were bullish on Air Products and Chemicals, Inc. (NYSE:APD), compared to 41 funds in the prior quarter. Phill Gross and Robert Atchinson’s Adage Capital Management is the biggest stakeholder of the company, with 222,340 shares worth $63.8 million. 

ClearBridge Large Cap Value Strategy made the following comment about Air Products and Chemicals, Inc. (NYSE:APD) in its Q4 2022 investor letter:

“In the materials sector, Air Products and Chemicals, Inc. (NYSE:APD)’s ability to recover higher energy costs, particularly in Europe as it continues to execute on its growth projects, has helped it to generate a positive return for the year and made it a strong contributor. The capital APD is deploying into hydrogen products globally is finally getting noticed as Europe is looking to diversify away from Russian natural gas and the Inflation Reduction Act (IRA) benefits domestic investments in renewables, such as APD’s $4.5 billion blue hydrogen project in Louisiana and its $4 billion green hydrogen production facility in Texas. APD is also teaming up with World Energy to build a $2.5 billion sustainable aviation fuel production facility in Southern California, a project that should also benefit from the IRA.”

4. DuPont de Nemours, Inc. (NYSE:DD)

Number of Hedge Fund Holders: 52

DuPont de Nemours, Inc. (NYSE:DD), a multinational chemical company, has been actively working to utilize hydrogen as a clean energy source. On April 19, DuPont de Nemours, Inc. (NYSE:DD) declared a $0.36 per share quarterly dividend, in line with previous. The dividend is distributable on June 15, to shareholders of record on May 31. 

On June 2, Deutsche Bank reaffirmed a Buy rating on DuPont de Nemours, Inc. (NYSE:DD) and set a price target of $80 on the shares. The bank believes that a recent settlement involving PFAS, which includes Chemours and Corteva, removed a significant overhang on DuPont shares.

According to Insider Monkey’s first quarter database, 52 hedge funds were long DuPont de Nemours, Inc. (NYSE:DD), compared to 48 funds in the earlier quarter. Dan Loeb’s Third Point is a prominent stakeholder of the company, with 4 million shares worth $287 million. 

Third Point made the following comment about DuPont de Nemours, Inc. (NYSE:DD) in its Q4 2022 investor letter:

“We recently increased our investment in DuPont de Nemours, Inc. (NYSE:DD), a specialty chemical company run by legendary value creator Ed Breen, who is leading a corporate transformation. In November, DuPont divested its most cyclical and lowest margin business segment, Mobility & Materials, to Celanese for $11 billion, or 14x 2023e EV/EBITDA. Following the divestiture, the improved DuPont trades at 11x 2023e EV/EBITDA, which represents a ~30% discount to its peer group.

We believe the company is laser-focused on closing this gap. First, $5 billion of the proceeds are being deployed to repurchase nearly 15% of its outstanding shares. The next significant catalyst for the stock is a potential settlement of PFAS-related multidistrict litigation in South Carolina, which remains an overhang on the stock even though DuPont’s PFAS liability was largely ring-fenced by the 2021 settlement with Chemours and Corteva. DuPont’s strong management team is eager to demonstrate the business quality of the new portfolio during the current period of economic volatility. We expect the combined catalysts of increased share repurchases, the pending resolution of legal claims, and the new business structure to drive meaningful value for shareholders.”

3. Chevron Corporation (NYSE:CVX)

Number of Hedge Fund Holders: 64

Chevron Corporation (NYSE:CVX) is one of the founding members of the alliance which plans to create a prominent hydrogen hub on the U.S. Gulf Coast. This initiative is known as the HyVelocity Hub, and it aims to engineer diverse infrastructure for hydrogen production and transportation. Justin Kostohryz, Chevron commercial advisor for hydrogen, commented in January 2023: 

“With Texas being a leading producer of natural gas, with extensive infrastructure, geology for carbon sequestration and access to international export facilities, we very much believe the U.S. Gulf Coast is positioned well for a hydrogen hub.”

On June 1, RBC Capital upgraded Chevron Corporation (NYSE:CVX) to Outperform, raising the price target from $165 to $180. The analyst noted Chevron’s successful utilization of its premium valuation to acquire companies, citing the recent acquisition of PDC Energy as an example. RBC believes Chevron’s strategic approach and financial stability will reap long-term defensive benefits.

According to Insider Monkey’s first quarter database, 64 hedge funds were bullish on Chevron Corporation (NYSE:CVX), compared to 57 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway is the largest stakeholder of the company. 

Carillon Tower Advisers made the following comment about Chevron Corporation (NYSE:CVX) in its Q4 2022 investor letter:

“Energy performed well during the fourth quarter, with the sector up about 23%. Investors returned to the sector after the Organization of the Petroleum Exporting Countries (OPEC) signaled it would reduce production. Chevron Corporation (NYSE:CVX) reported strong quarterly results while buying back stock, paying a healthy dividend, and maintaining a strong balance sheet.”

2. Linde plc (NYSE:LIN)

Number of Hedge Fund Holders: 70

Linde plc (NYSE:LIN) is an industrial gas company that provides oxygen, nitrogen, argon, carbon dioxide, helium, and hydrogen, among others. Linde plc (NYSE:LIN) is one of the best hydrogen stocks to invest in. On April 24, the company declared a $1.275 per share quarterly dividend, in line with previous. The dividend is payable on June 16, to shareholders of record on June 2. 

On May 12, Berenberg raised its price target on Linde plc (NYSE:LIN) to $415 from $375, while maintaining a Buy rating on the shares. According to the firm, Linde is prioritizing the “take-or-pay” model for industrial gas volumes, leaning towards stability over taking on price risks associated with clean hydrogen or ammonia. The current primary business of Linde is performing strongly, Berenberg wrote in a research note to investors.

According to Insider Monkey’s first quarter database, 70 hedge funds were bullish on Linde plc (NYSE:LIN), compared to 56 funds in the earlier quarter. 

Madison Funds made the following comment about Linde plc (NYSE:LIN) in its fourth quarter 2022 investor letter:

“Linde plc (NYSE:LIN) stock was strong during the fourth quarter following a solid third quarter. Linde remains well positioned with the passage of the Inflation Reduction Act and energy transition with carbon dioxide sequestration opportunities, gasification services, and various hydrogen projects. Linde and Schlumberger announced that they entered into a collaboration of carbon capture, utilization, and sequestration (CCUS) projects to accelerate decarbonization solutions across industrial and energy sectors. The collaboration will combine decades of experience in carbon dioxide capture and sequestration. The collaboration will focus on hydrogen and ammonia production where carbon dioxide is a by-product. The International Energy Agency estimates that 6 Gigatons of carbon dioxide will need to be abated with CCUS in order to reach net zero by 2050. During the quarter, Linde also announced that it became a signatory to the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative. As a signatory, Linde has committed to aligning its strategy and activities with the UNGC’s Ten Principles across human rights, labor, environment, and anti-corruption.”

1. Exxon Mobil Corporation (NYSE:XOM)

Number of Hedge Fund Holders: 73

Exxon Mobil Corporation (NYSE:XOM), the American oil and gas giant, is set to enter the hydrogen space by manufacturing a world-class blue hydrogen plant at its Texas refining and petrochemical complex. Along with carbon capture and storage, blue hydrogen will result in lower emissions across Exxon Mobil Corporation (NYSE:XOM)’s operations. It is one of the top hydrogen stocks to watch. 

The company’s net income more than doubled to $11.43 billion in the first quarter of 2022 and oil and gas net production equaled 3.83 million boe/day, up 4.2% on a year-over-year basis. The company also raised and extended its share repurchase program, adding up to $35 billion in repurchasing capacity during 2023-2024.

According to Insider Monkey’s first quarter database, 73 hedge funds were bullish on  Exxon Mobil Corporation (NYSE:XOM), compared to 79 funds in the earlier quarter. Rajiv Jain’s GQG Partners is the largest stakeholder in the company, with a position worth $2.14 billion. 

Here is what First Eagle Investments had to say about Exxon Mobil Corporation (NYSE:XOM) in its second-quarter 2022 investor letter:

“Integrated oil and gas giant Exxon Mobil performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”

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Disclosure: None. 11 Best Hydrogen and Fuel Cell Stocks To Buy is originally published on Insider Monkey.