Hydrogen Stocks to Buy in 2024 - Powering Your Portfolio

Written By Ben Broadwater

Posted April 25, 2024

There are many options when considering hydrogen stocks to buy in 2024. Hydrogen, the most abundant element in the universe, is quietly emerging as a game-changer in the energy sector. But does it truly hold the key to a clean and sustainable future?

hydrogen stocks to buy

Promising Hydrogen Stocks to Buy in 2024

1. Linde (LIN): A global leader in industrial gases, Linde (LIN) boasts a well-established hydrogen production and distribution network. They’re actively investing in clean hydrogen projects, making them a strong player for long-term growth in the sector.

2. Bloom Energy (BE): Bloom Energy (BE) stands out for its innovative hydrogen fuel cell technology. Their Bloom Electrolyzer produces more hydrogen per megawatt than competitors, making it an attractive option for clean hydrogen production. With a recent rebound and growing partnerships, BE could be poised for a strong year.

3. Air Products (APD): Despite a recent earnings miss, Air Products (APD) remains a major player in the industrial gas industry. They have significant investments in hydrogen infrastructure and are well-positioned for a rebound as the hydrogen market expands.

4. Beyond the Big Three: The hydrogen sector is teeming with exciting companies. Here are a few hydrogen stocks to buy to keep on your radar:

  • Ballard Power Systems (BLDP): A developer of proton exchange membrane (PEM) fuel cells for electric vehicles.
  • Cummins Inc. (CMI): A leading manufacturer of internal combustion engines, Cummins is also investing in hydrogen and fuel cell technologies.
  • Global X Hydrogen ETF (HYDR): This Exchange Traded Fund offers a diversified way to invest in the hydrogen sector, holding stocks across the hydrogen production, storage, and fuel cell space.

Who is the Leader in Hydrogen Fuel Cell Technology?

While there are many strong players, Ballard Power Systems (BLDP) is widely considered a global leader in hydrogen fuel cell technology. They’ve been around for decades and have a proven track record of developing and commercializing PEM fuel cells for various applications.

Ballard Power Systems Inc

Let’s delve deeper into the potential and challenges surrounding hydrogen as an energy source.

The Allure of Hydrogen

There are several compelling reasons why hydrogen is garnering significant attention:

  • Clean Burning: When used in a fuel cell, hydrogen produces electricity, water vapor, and heat. Unlike fossil fuels, it doesn’t release harmful greenhouse gasses, making it a critical player in combating climate change.
  • Energy Dense: Hydrogen packs a powerful punch. By weight, it holds more energy than gasoline, making it ideal for applications where weight is a concern, like electric vehicles with extended range.
  • Versatile Fuel: Hydrogen’s applications extend beyond transportation. It can be used for industrial processes, heating buildings, and even storing excess renewable energy.
  • Renewable Production: Hydrogen itself isn’t an energy source, but a carrier. The magic lies in its production. Electrolysis, powered by renewable sources like solar or wind, can split water molecules into hydrogen and oxygen. This “green” hydrogen is the cornerstone of a sustainable energy future.

Challenges on the Road to Adoption

Despite its promise, hydrogen faces some significant hurdles before widespread adoption:

  • Production Costs: Currently, producing clean hydrogen through electrolysis is expensive. Technological advancements and economies of scale are needed to bring down the cost.
  • Storage and Transportation: Hydrogen is a gas with a low energy density by volume. Storing and transporting it efficiently requires specialized infrastructure, which is still under development.
  • Infrastructure Development: Widespread adoption of hydrogen vehicles hinges on a robust network of refueling stations. Building this infrastructure requires significant investment from governments and private companies.
  • Competition from Renewables: Battery technology for electric vehicles is rapidly improving, posing a significant challenge to hydrogen fuel cells in the transportation sector. 

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Hydrogen Stocks to Buy – The Road Ahead

Despite the challenges, there’s a growing consensus that hydrogen will play a crucial role in the energy transition. Here’s what could shape its future:

  • Government Support: Government policies like subsidies for clean hydrogen production, tax breaks for hydrogen vehicles, and funding for infrastructure development are crucial for accelerating adoption.
  • Technological Advancements: Research and development efforts are focused on improving electrolysis efficiency, lowering production costs, and developing better storage and transportation solutions.
  • Falling Renewable Energy Costs: As the cost of solar and wind power continues to decline, producing green hydrogen becomes more economical, boosting its overall appeal.
  • Focus on Specific Applications: In the near future, hydrogen might be more suited for specific applications like long-haul trucking, heavy machinery, and industrial processes where battery technology falls short.

Additional Points to Consider

  • The emergence of a “hydrogen economy” could create new jobs and economic opportunities across various sectors.
  • Public perception and consumer adoption will play a crucial role in driving investment and infrastructure development.
  • International collaboration on research and development efforts can accelerate progress towards a viable hydrogen future.

By staying informed about the latest advancements and ongoing discussions, you can form a well-rounded opinion on the potential of hydrogen in the energy landscape.

Should I Buy Hydrogen Stocks?

Investing in any stock involves inherent risk. Here are some things to consider before buying hydrogen stocks:

  • Conduct thorough research: Research individual companies’ financial health, technological advancements, project pipelines, and market positioning.
  • Consider the overall market: The hydrogen sector is still young, and its growth trajectory depends on factors like government support, infrastructure development, and consumer adoption.
  • Diversify your portfolio: Don’t put all your eggs in one basket. Balance hydrogen stocks with other investment options to mitigate risk.

Important Note: Earnings season is approaching in early May 2024. Keep an eye on the upcoming reports from Linde (LIN), Cummins (CMI), Bloom Energy (BE), and Ballard Power Systems (BLDP) for insights into their financial performance and future outlook.

Related Content: Investing In Solar Energy

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