Hydrogen Stocks: Navigating the Market in 2024
Key Ideas
- Global X Hydrogen ETF has seen a 23.7% YTD drop, but not all hydrogen-related stocks have suffered equally.
- Investors are advised to consider larger, established companies like Air Products and Chemicals, BP, and Bloom Energy for hydrogen investments.
- Air Products, a major industrial gas firm, remains a solid hydrogen investment despite macroeconomic challenges, boasting a significant market presence in clean hydrogen.
- BP, a leading oil and gas giant, has increased investments in renewable energy, focusing on hydrogen projects, making it an attractive hydrogen stock bet with a low valuation multiple.
- Bloom Energy, a pure-play hydrogen firm, maintains a strong balance sheet and is well-positioned to weather short-term market headwinds with its solid-oxide fuel cell systems.
In 2024, hydrogen stocks have yet to recover, with the Global X Hydrogen ETF experiencing a significant 23.7% year-to-date decline. However, not all companies engaged in developing hydrogen have faced the same fate this year. Investor recommendations include looking beyond pure-play startup hydrogen businesses and exploring opportunities in larger, established companies. Air Products and Chemicals, a major industrial gas firm with a significant market capitalization, remains a solid hydrogen investment despite challenges in revenue growth. BP, a global oil and gas giant, has been increasing its investments in renewable energy, particularly in hydrogen projects, offering an appealing hydrogen stock option with a low valuation multiple. Bloom Energy, a pure-play hydrogen firm specializing in solid-oxide fuel cell systems, has maintained a strong balance sheet, with recent capital raises enhancing its financial resilience. Overall, these three companies offer promising avenues for investors seeking exposure to the hydrogen market amidst the evolving macroeconomic landscape.