Plug Power stock price continued its strong rally this year as Wall Street analysts remained upbeat about the company. It also jumped on optimism that Donald Trump’s policies will not be as harmful to the company as expected.
PLUG stock ended the week at $3.8 and then soared to $4.60 on Monday. This means that it has jumped by over 580% from the year-to-date low of $0.6867. Its market capitalization has soared to over $4.5 billion, while the short interest is up to 30%.
Why the Plug Power stock price has jumped
Plug Power share price has been in a strong bull run this year. The current surge happened after H.C. Wainwright boosted its target price substantially, pointing to the demand for hydrogen in the power sector. He boosted the stock target to $7, noting that:
“We believe that if electricity prices continue to trend higher, green hydrogen is likely to become increasingly price-competitive and case for adoption becomes stronger.”
Plug Power stock price also jumped after the company said that it had delivered its first electrolyzer array to Galp, a leading energy company in Portugal.
Precisely, the product was delivered to its Sines refinery, which is the biggest proton exchange membrane hydrogen electrolyzer project in Europe. The delivery is a sign that its products are having strong demand.
Additionally, the company has done well as investors reflected on the Trump administration, which has continued giant funding that was approved by the Biden administration.
The company will receive a $1.55 billion DoE loan that will be used to fund up to 6 green hydrogen and liquefaction plants across the country.
Strong financial results
Plug Power stock price has also jumped after the company published strong financial results. The numbers showed that its revenue rose to $173 million in the three months to June, higher than the $143 million it made in the same period this year.
Most of the revenue – $99 million – came from the sale of equipment and related infrastructure. The rest of the revenue came from the power purchase agreements, fuel delivered to consumers, and the services it offered on fuel cells.
The results also showed that the company’s net loss narrowed during the year’s second quarter and the first half. It made a loss of $228 million in the last quarter, an improvement from the $262 million loss it made in the same period last year.
The loss in the year’s first half was also lower than last year. Therefore, analysts expect that the company’s business will continue improving.
The other potential catalyst for the ongoing Plus Power stock price surge is that this is primarily a short squeeze because it is one of the most shorted companies globally.
SeekingAlpha data shows that over 358 million shares have been sold short, giving it a short interest of 31%. It is common for a highly shorted company to surge, especially when there is a strong surge in the stock market.
Plug Power share price technical analysis
The daily timeframe chart shows that the PLUG stock price has been in a strong uptrend in the past few months, moving from a low of $0.6976 in May to $4.50 today.
It has jumped above the important resistance level at $3.30, its highest level on June 7. It remains above all moving averages, while the Relative Strength Index (RSI) and the MACD indicators have continued rising.
Therefore, the stock will likely continue rising in the near term, and then it will reverse when the momentum ends. In this case, a drop to the key support at $3.30 cannot be ruled out.
Read more: Insiders are buying Plug Power stock: is a short-squeeze coming?
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