Is Now the Right Time to Invest in Plug Power Shares?

Plug Power ( PLUG 20.87%) is largely considered a speculative stock. In the early 2000s, shares of this hydrogen energy company peaked at $1,497.50. However, this number is somewhat misleading due to a 1-for-10 reverse stock split; the actual price at that time was closer to $150 per share.

Today, Plug Power’s shares trade at about $2 each. When factoring in the reverse split, that’s equivalent to just $0.20 per share compared to the $150 high. Is it wise to invest in Plug Power after such a steep decline? Let’s take a closer look.

What is Plug Power’s business?

Plug Power says it is “creating a comprehensive green hydrogen network, covering everything from production and storage to distribution and power generation, to assist customers in achieving their goals and reducing carbon emissions.” Simply put, the company manufactures hydrogen fuel cells, which generate energy from hydrogen, as well as electrolyzers that extract hydrogen from water for use in these fuel cells.

This technology stands out because hydrogen power primarily produces heat and water as its byproducts, making it much cleaner than fossil fuels, which emit harmful gases and pollutants. Hydrogen fuel cells can be especially beneficial in certain areas. For instance, forklifts operating inside warehouses would be safer for workers if powered by hydrogen. This represents a significant market, but other sectors, such as trucking, are also exploring hydrogen options.

From an environmental perspective, Plug Power’s business model is appealing. However, investors don’t focus solely on sustainability—at least, not indefinitely. When the company went public, optimism about hydrogen’s potential was a major factor behind its rising stock price.

Yet, as is often the case with stocks driven by hype, Plug Power’s actual performance failed to meet lofty expectations. The resulting sharp drop in the share price eventually required a 1-for-10 reverse split to avoid being delisted—a typical step for companies whose stock falls below $1. Generally, penny stocks are best avoided by all but the most risk-tolerant investors.

Such a significant decline, along with the reverse split, are warning signs. Following a dramatic surge in 2020, the stock has remained stagnant. Some investors may view this as a chance to invest early in a promising clean energy company, while more cautious individuals might see it as a sign of the risks associated with stocks whose value is based on a narrative rather than results.

PLUG data by YCharts

The main challenge facing Plug Power

Plug Power’s technology is certainly innovative, but that alone isn’t sufficient for success. The company’s biggest hurdle is the lack of infrastructure, especially when compared to the well-established systems supporting oil.

The oil industry has a massive network—oil is extracted, transported, refined into products like gasoline, distributed to stations, and then purchased by consumers. Hydrogen, by contrast, lacks this extensive infrastructure and customer base.

So, companies interested in Plug Power’s products must be willing to adopt a less accessible fuel and use technology that isn’t as widely supported. This demands a business that is prepared to take risks and invest more for the sake of environmental benefits. The higher costs associated with hydrogen, as compared to other energy sources, are largely due to this lack of scale.

It’s not surprising, then, that Plug Power continues to operate at a loss. With substantial ongoing investments required for research, development, and building a hydrogen distribution network, it’s likely the company will remain unprofitable for years. Even when there’s positive news, it’s still not entirely encouraging—Plug Power’s gross profit in the second quarter of 2025 improved significantly, but only from -92% last year to -31% this year.

Exercise caution with Plug Power

Plug Power has an appealing narrative, but that’s currently its strongest feature. Unless you’re fully convinced by the company’s story, it may be best to hold off on investing. Should Plug Power, and hydrogen energy in general, achieve broader commercial success, then the stock could become more attractive.

For most people, it’s better to miss out on possible gains than risk an early entry into a volatile market. If Plug Power’s hydrogen ambitions fall short, investors could face significant losses—a scenario that, unfortunately, has already happened to many who bought in based on the company’s story.