2023 was a forgettable year for hydrogen stocks and the broader clean energy industry. Geopolitical issues, heightened interest rates, and rampant inflationary pressures were to blame for clean energy’s lackluster showing. Moreover, the Direxion Hydrogen ETF (NYSEARCA:HJEN) lost 20% of its value last year. This indicates the challenges confronted by the market.
Nonetheless, hydrogen stocks could become multi-bagger investments for investors with a long-term investing horizon. Hydrogen and other renewable energy sources are critical components in the global effort to curb carbon emissions and combat climate change. The hydrogen market alone is expected to grow by 7.80% from 2023 to 2030 to reach $410.6 billion.
With that, here are three hydrogen stocks worth betting on for long-term gains. If you invest $300K equally in the three hydrogen stocks discussed, aiming for the amount to compound to $1 million over a decade, each stock will need to grow by 233%. Such extraordinary gains may seem daunting, but they seem likely given the tailwinds propelling the sector.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is a leading solid oxide fuel cell provider that’s made big headway over several years. This can be seen from the 438% increase in its top-line over the past decade to $1.33 billion last year. However, its stellar operating performance hasn’t been reflected in its stock price, with BE stock down 50% in the past three years. Nevertheless, it remains an attractive long-term play, especially with its foray into the hydrogen industry.
The company’s game-changing Bloom Electrolyzer promises to redefine hydrogen energy production through its unmatched efficiency. This is while the company generates an impressive 20% to 25% more hydrogen per megawatt than its competition. Moreover, it can be deployed within two months, adding to its tremendous accessibility. With the global focus on clean energy intensifying, I expect Bloom’s hydrogen business to play a major role in its long-term growth trajectory.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is known for its popular EV charger business. Its hydrogen initiatives could take its business to the next level. It’s currently the largest supplier of liquid hydrogen. Moreover, its cutting-edge hydrogen-powered fuel cells have proven a hit with the biggest supply chain and logistics businesses. It’s formed strategic partnerships with giants, including Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT), to name a few.
To be fair, you need a strong stomach to handle investing in PLUG at this point. Its stock sank more than 60% last year, which aligns with the EV market slowdown. Consequently, its losses are widening, posing serious questions about its long-term financial positioning. To control the bleeding, it implemented a cost-cutting initiative, which should help save $75 million. Cutting operational costs and strategic review is likely to positively impact PLUG’s business as it navigates an incredibly challenging phase.
BP (BP)
BP (NYSE:BP) is an oil and gas titan and one of the best low-risk ways to gain exposure to the hydrogen space. The fossil fuel giant has been diversifying its energy portfolio towards sustainable energy, and hydrogen is a huge part of the transition.
The great thing about BP is that its core business is stable, and it continues to generate billions in free cash flows to support its green energy initiatives. Through its vast experience, extensive infrastructure, and colossal internal reserves, BP is looking to spearhead the hydrogen energy revolution.
With more than 10 projects in Europe, the U.S., and Australia, BP aims to produce 0.5 to 0.7 million tonnes of low-carbon hydrogen each year. In the U.K. alone, BP targets 500MW of green and 1GW of blue hydrogen production by the end of the current decade. Also, its Australian Renewable Energy subsidiary is set to generate 1.6 million tonnes of green hydrogen annually. This positions BP as a true juggernaut in the clean energy transition.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.