MW Plug Power is using the AI power boom to generate cash and ditch unneeded government support

By Tomi Kilgore

The hydrogen and fuel-cell company backed out of a government loan program as part of a new strategy to focus on making money and keeping things simple

Plug Power has dropped out of a government loan program, deciding it was more cost-effective to pay for hydrogen supply than to build its own network. Analysts agree.

Plug Power Inc.'s third-quarter results may have looked bad on the surface, as the hydrogen and fuel-cell company continues to bleed money, but Wall Street seems pleased that bold moves the company has made confirm its new commitment to generate cash and simplify the business.

Although the stock $(PLUG)$ has skyrocketed in recent months, with investors looking at it as a cheap way into the massive growth in demand for power to fuel the buildout of artificial-intelligence infrastructure, the company is still digging its way out of trouble. Plug Power has reported wider-than-expected quarterly net losses for at least the past five years, according to available FactSet data going back to November 2020.

The company warned investors two years ago that there was "substantial doubt" in its ability to continue as a going concern. Just six months ago, the stock closed at a 12-year low of 70 cents. And last month, the company said it was replacing CEO Andy Marsh, who has been in charge for 17 years, with Jose Luis Crespo, its current chief revenue officer.

The stock slumped 6.6% toward a six-month low in recent morning trading Tuesday to reverse an intraday gain of as much as 6.6% seen just after the opening bell. The stock was still up 241.4% since its May 15 closing low.

One announcement the company made late Monday that analysts praised was that it has suspended activities under the U.S. Department of Energy loan program so that it can redeploy its resources to other hydrogen projects that have potential for higher returns.

The $1.7 billion DOE loan program, which was announced in May 2024, had initially sent Plug's stock soaring, but the shine quickly wore off given the capital constraints of building out its own hydrogen network. Plug said it recently entered into a hydrogen-supply agreement to fuel AI power needs with an unnamed "leading" industrial gas company, which "reduces the need for near-term self-deployment of new plants."

Basically, Plug decided that it was more cost-effective to pay for hydrogen supply than to borrow money from the government to produce it.

J.P. Morgan analyst William Peterson liked the decision. "Plug has sufficient internal and third-party hydrogen supply to support expected material handling demand over the next few years," he said.

Another sign of Plug's new focus was the Monday announcement of its plan to make money off its electricity rights, or guaranteed access to power, in New York and another location. The deal with a "major U.S. data center developer" is expected to generate more than $275 million in cash.

Oppenheimer's Colin Rusch called that deal a "clever use of assets," as it was evidence of progress the company was making on its path to profitability.

Marsh, who is serving as CEO until March, said on the post-earnings call with analysts that while he doesn't know if there will be other deals like that one, "we have been engaging in another asset," according to an AlphaSense transcript. And he's confident that the company will be gross-margin positive or neutral - meaning revenue will outpace or be equal with the cost of sales - at the end of the year.

Separately, the company reported late Monday a third-quarter net loss that widened to $361.9 million, or 31 cents a share, from $211.2 million, or 25 cents a share, in the same period a year ago. The average analyst estimate for per-share losses, as compiled by FactSet, was 12 cents.

Meanwhile, revenue grew 1.2% to $177.1 million, above the FactSet consensus of $176.3 million. That marked the third straight quarter of top-line beats, which followed a seven-quarter streak of misses.

Plug Power's stock has run up 51.3% over the past three months, while the iShares Global Clean Energy exchange-traded fund ICLN has rallied 30.8% and the S&P 500 index SPX has gained 6.8%.

-Tomi Kilgore

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November 11, 2025 11:47 ET (16:47 GMT)

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