Hydrogen stocks poised to soar after Walmart’s Firestarter

They say timing is everything. And right now is the perfect time to seek hydrogen stocks to buy.

By “right now” I literally mean right now.

Yesterday we said that 2022 would be the year when hydrogen becomes a viable clean energy technology. And this is mainly due to the falling costs of its production as well as the skyrocketing costs of oil and natural gas. (It all comes down to economics). As a result, the $11 trillion hydrogen economy will begin to emerge.

We didn’t know yesterday would be the same day the H2 revolution is underway.

In fact, yesterday walmart (NYSE:WMT), the largest retailer, announced a historic agreement with Plug Able (NASDAQ:PLUG), the largest producer of hydrogen. The latter will provide enough green hydrogen to power essentially all Walmart forklifts worldwide.

Of course, these are just forklifts. But you have to start somewhere. Listen to me carefully. This is the start of all of Walmart’s operations – stores, trucks, forklifts, etc. – switching to hydrogen.

See why we’re so optimistic? This case light a fire under already glowing hydrogen reserves. Indeed, Plug Power stock jumped 10% just yesterday, adding to its already absurd gain of 1,140% over the past five years.

A graph illustrating the evolution of the Plug Power stock price

But in truth, we think this party for Plug Power – and all hydrogen stocks – has only just begun.

It’s time to buy. the the next wave of the energy revolution is here. And just like the latest wave – electric vehicles and solar power – it will also hit millionaires.

The only question is: Will you be one of them?

Walmart kicks off hydrogen stocks

We didn’t know this was going to happen. But yesterday, the same day, we said the hydrogen revolution was ready to go into hypergrowth mode, the largest green hydrogen production contract in the world has been concluded.

Specifically, the leading company H2 Plug Power announced its agreement to supply 20 tons of green hydrogen per day to Walmart.

Context is necessary to understand the magnitude of this deal, as it is much larger than it first appears.

Hydrogen is the lightest element in the universe. Therefore, hydrogen fuel cells are the most energy dense power source in the world. To this end, hydrogen fuel cells are most useful in long-range, heavy-duty situations. There you need a power source that is powerful and doesn’t require a lot of downtime. And one of those applications is forklifts.

Thus, in recent years, Plug Power has focused on manufacturing hydrogen fuel cells for forklifts. Walmart has long been interested in this idea. In fact, since 2012 Walmart has purchased thousands of hydrogen powered forklifts from Plug Power.

Recently, Plug Power expanded its operational focus from being a hydrogen forklift company to an all-in-one hydrogen power plant. This has included the creation of green hydrogen production plants.

Short summary: Green hydrogen is H2 produced from renewable energies. Interestingly, although hydrogen is the most abundant element in the universe, it does not naturally exist in its pure form. Therefore, to produce it, we must obtain it from other sources of energy. These sources can be fossil fuels (which produce “grey hydrogen” or “blue hydrogen”) or renewable energies such as solar energy (which produce “green hydrogen”).

An image describing the different types of hydrogen production and their original fuel sources

Hydrogen today

Most of the hydrogen energy used today is gray hydrogen. And that’s simply because the cost of producing green hydrogen has been prohibitive. Ecologically, this is problematic because gray hydrogen is not really different from fossil fuels. It’s just wrapped in a different package.

Most energy analysts have long predicted that the key driver of the H2 revolution depends on the profitability of green hydrogen.

We seem to be at this crucial inflection point today.

Just look at the Walmart deal. The world’s biggest retailer wouldn’t strike a deal for 20 tonnes of green hydrogen a day – enough to power around 25,000 forklifts – if it didn’t believe Plug Power could supply at competitive cost levels.

And if so, then this is just a sample of what’s to come. Walmart will test green hydrogen as a fuel source for forklifts. Then it will start using green hydrogen in its delivery trucks and vans. Endgame, the company will use it to supply the stores.

It is possible that green hydrogen costs are at a critical inflection point to become economically viable. And that could very well be the start for the world’s largest retailer powering its entire operations with green hydrogen.

This may mark the start of a new energy revolution.

The start of an energy revolution

The science seems to strongly support the claim that green hydrogen costs are at a tipping point. And it reinforces the belief over the next few years, improving economy will lead to robust and widespread adoption of green hydrogen.

In other words, Walmart could be the first in a series of mega-corporations to start buying green hydrogen for fuel.

Oil and gas prices are on the rise. But the costs of green hydrogen are falling. Indeed, solar and wind generation costs are decreasing due to economies of scale. This is also because the costs of electrolyzers are falling. And electrolysis is a key part of producing green H2.

So when it comes to green hydrogen, the two most important cost drivers are rapidly decreasing. But when it comes to gray hydrogen, input costs go up.

The result? A flip-flop of the cheapest hydrogen production method.

In April 2022, due to soaring gas prices, Europe, the Middle East, Africa and China saw the costs of green hydrogen drop below those of gray hydrogen. According to Bloomberg New Energy Finance, producing green hydrogen is about 15% cheaper across Europe and 40% cheaper in China.

This marks a critical instant in time.

Green hydrogen wasn’t supposed to be cheaper than gray until 2030. But it’s already got there. The original projections called for H2 costs to break even with fossil fuels in 2028. Although it looks like that time could come much sooner.

A chart illustrating the expected timeframe for energy source cost breakeven

In other words, green hydrogen could soon be, if not already, the cheapest source of energy in the world.

No wonder Walmart just signed the biggest green hydrogen contract ever.

The Final Word on Hydrogen Stocks

Some things in life are coincidences. It’s not. This is the strategic agreement of the world’s largest distributor to secure the production of green hydrogen before a “gold rush” occurs very soon.

And this gold rush will send stocks of hydrogen – and all alternative energy stockss – significantly higher.

They say timing is everything. Well today the timing couldn’t be more perfect for hydrogen stocks – or any alternative energy stock, really.

With soaring fossil fuel prices and falling renewable energy spending, cost parity dates for clean energy have been accelerated by several years. The same goes for the whole new energy revolution.

There are several ways to play it — hydrogen stocks. solar or wind stocks, energy storage stocks; even battery stocks.

All are great long-term investments that will generate huge returns over the next three, five, and 10 years. Learn more about these excellent investment opportunities.

I’ll give the final word to Plug Power CEO Andy Marsh:

“I’ve had the worst and the best times here. It’s one of the best times.

As of the date of publication, Luke Lango had (neither directly nor indirectly) any position in the securities mentioned in this article.

Garland K. Long