Plug Power (PLUG -4.87%) stock hasn't given investors much to celebrate in 2025. While the S&P 500 had risen 7.9% as of this writing, the hydrogen and fuel cell stock had plummeted 31% through Aug. 6, extending 2024's 53% decline.

But that doesn't mean that Plug stock can't turn things around in the remainder of 2025. Taking into account management's comments from the fourth-quarter 2024 conference call in March, I'm paying close attention to one thing in particular as the company reports quarterly earnings during the rest of the year.

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Will Project Quantum Leap provide a quantum leap in profitability?

Several months ago, Plug announced a new cost-reduction initiative: Project Quantum Leap. Targeting $150 million to $200 million in annual savings from the renewed effort to cut expenses, Plug plans on reducing staff, consolidating facilities, and limiting discretionary spending in addition to other steps.

While Plug consistently fails to generate profits, some investors may look at the new cost-saving initiative with skepticism, surmising that the announcement is meant to placate frustrated shareholders. What has me interested, however, is that the early indication of this endeavor suggests that it may actually be bearing fruit.

In the first quarter of 2025, Plug reported a negative 55% gross profit margin, a notable improvement over the negative 132% gross profit margin it reported during Q1 2024.

The reason I'm watching Plug carefully, however, is management's commentary from the fourth-quarter 2024 conference call, when CFO Paul Middleton said that the company expects "initiatives and Project Quantum Leap to provide meaningful incremental improvement in margins and cash flows starting in Q2 of 2025 and building throughout the year."

Should Plug report further gross margin improvements in the upcoming quarters, it will be an auspicious sign for the beleaguered hydrogen company.

Should investors power their portfolios with Plug stock?

One quarter of year-over-year gross profit margin improvement hardly makes Plug a buy. If the company makes significant progress toward generating a gross profit, though, Plug stock may become much more appealing.