Plug Power Stock: A Rollercoaster Ride on Tuesday

As the market opened on Tuesday, Plug Power (PLUG) stock rocketed more than 10% in early trading, hitting $3 per share before giving back most of its gains and retreating to a single-digit gain by 10:20 a.m. ET. So, what caused this volatility, and why did the stock give up its gains so quickly?



Plug Power's good news Tuesday

In a note out this morning, investment bank Morgan Stanley predicted that Plug Power would receive Department of Energy approval for a $1.7 billion loan by the end of this week. As the analyst explained, the Biden administration is likely to approve this loan ahead of President Trump's inauguration to "reduce the risk of potential claw-back of this loan." Assuming Morgan Stanley is right about that, Plug Power is about to get a big bump in its stock price once the loan approval becomes official.

Is Plug Power stock a buy?

So, you should buy Plug Power stock, right? Well, not so fast. The loan approval will be good news if it happens, no doubt. But Morgan Stanley still doesn't think the stock is a "buy," and in fact, reiterated its "underweight" rating (i.e., "sell") on Plug stock, and stuck with a $1.75-per-share target price on the shares.

And why did MS do this? Because, according to the banker, even $1.7 billion in government money won't be enough to save Plug Power. Remember that the company burned through $1.8 billion in cash in 2023. It continued burning cash through 2024 – about $892 million in the first three quarters, implying about $1.2 billion in negative free cash flow for all of 2024.

With less than $100 million in cash remaining, and well over $900 million in debt already accumulated, Morgan Stanley thinks Plug Power will have to raise at least $500 million more in cash this year, through the sale of new stock. Loan or no loan, Plug Power stock remains a sell.

Plug Power's St. Gabriel hydrogen plant is set for Q1 2025, boosting production capacity to 39 TPD

On Tuesday, Plug Power, Inc. (PLUG) confirmed that its new 15-ton-per-day (TPD) hydrogen plant in St. Gabriel, Louisiana, is on track for its first-quarter operations. The facility, a joint venture between Plug Power and Olin Corporation, uses Olin’s by-product hydrogen from chlorine production and will be a key addition to Plug’s expanding North American hydrogen network.

The project is progressing steadily with a strong focus on safety, having achieved over 412,000 safe working hours with zero recordable injuries. The plant is currently undergoing a critical dry-out process to remove moisture and impurities from the piping, vessels, and mechanical systems, ensuring high-purity hydrogen production.

Once operational, the plant will boost Plug Power’s total hydrogen production capacity to 39 TPD, supporting growing demand from major partners like Amazon.com, Inc. (AMZN) and Walmart Inc. (WMT). With operations slated to begin in the first quarter, the St. Gabriel plant will strengthen Plug Power’s position as a leader in vertically integrated hydrogen solutions, providing more sustainable and reliable energy alternatives.

Plug Power will report fourth-quarter results on Monday, March 3, 2025.

Price Action: PLUG shares are trading lower by 0.31% to $1.585 at the last check on Tuesday.

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