2025 Hydrogen Energy Concept Stock Investment Guide: Starting from Risks and Opportunities

Global warming is forcing countries to transition toward a low-carbon economy. Driven by the overarching goal of “carbon neutrality,” hydrogen energy as a clean and efficient alternative energy source is gaining unprecedented attention. Many investors have already begun to focus on this sector, attempting to profit from the transformation of the energy industry. So, is 2025 really a good time to invest in hydrogen energy concept stocks? The answer to this question is not so simple.

The True Portrait of Hydrogen Energy Concept Stocks: Opportunities and Traps Coexist

What are hydrogen energy concept stocks?

Simply put, hydrogen energy concept stocks are those listed companies engaged in hydrogen production, storage, transportation, or related technology development. These companies cover the entire hydrogen industry chain, from upstream hydrogen production technology, midstream storage and transportation infrastructure, to downstream application scenarios (vehicles, power generation, industrial use).

These stocks sound very attractive, but the reality is: most companies involved in hydrogen research and infrastructure have been operating at a loss for years. The reason their stock prices can still fluctuate significantly is entirely driven by investor enthusiasm. Especially with the frenzy of ESG and sustainable development funds pouring in, these stocks have become hot topics. The result is wild swings in stock prices—soaring one day, collapsing the next.

Review of 2024: Outperforming the Market

Data shows that in 2024, the overall performance of hydrogen energy concept stocks was quite good. The Morningstar Global Hydrogen Index recorded a 4.86% increase in 2024. However, this performance doesn’t seem outstanding because it lagged behind the broader market.

Entering early 2025, these stocks continued to experience intense volatility. They faced a shock wave in early January, then quickly rebounded, fully demonstrating the market’s emotional nature.

Overview of Hydrogen Energy Concept Stocks: Some Rise, Some Fall

If you are considering investing in this sector, these companies are unavoidable:

Air Products and Chemicals Inc (NYSE: APD) rose 53.96% in the past year. As the world’s largest commercial hydrogen supplier, it leads in hydrogen fuel infrastructure. Wall Street’s 15 analysts give an average 12-month target price of $362.31, with a forecast range of $300–$385.

Plug Power (NASDAQ: PLUG) fell -55.17% in the past year. As a pioneer in hydrogen fuel cells, despite its poor stock performance, it remains industry-positioned—deployed 69,000 fuel cell systems and operates over 250 refueling stations. The average target price from 21 Wall Street analysts is only $2.73, with a high forecast of $5 and a low of $1, indicating significant market divergence on its prospects.

BP (NYSE: BP) declined -7.59% over the past year. This traditional energy giant has set a net-zero emission target for 2050, planning to invest in 5–10 hydrogen projects, with an expected annual low-carbon hydrogen production of 500,000 to 700,000 tons by 2030. Nine analysts’ average target price is $36.10, with a forecast range of $30–$50.

ZTE Electric (1513.tw) increased 22.45% in the past year. It is collaborating with domestic petrochemical giants, planning to build 2–3 large hydrogen stations by 2025. Orders amount to nearly 40 billion yuan, some extending to 2032. In 2024, its total revenue reached 25.61 billion yuan, up 15.65% year-over-year, setting a new record. The median target price from five analysts is 220 yuan.

GaoLi (8996.tw) rose 1.83% over the past year. It is a major OEM supplier for Bloom Energy’s fuel cell dust removal boxes. The company expects its plate heat exchanger business to grow in low double digits by 2025, and fuel cell dust removal boxes to grow in high double digits. The median target price from five analysts is 480 yuan.

True Signals of Industry Development

Policy support is strengthening

The U.S. Department of the Treasury recently announced the final rules for clean hydrogen production, clarifying that producers can receive up to $3 per kilogram in tax credits. This move removes market uncertainty and encourages more companies to invest in hydrogen projects. Following the announcement, new energy stocks including Plug Power surged.

Global hydrogen demand forecasts are staggering

According to the IEA’s “Net Zero by 2050” report, to achieve net-zero emissions, global hydrogen demand will reach 530 million tons by 2050. Seventeen countries have already formulated comprehensive hydrogen development strategies. In Taiwan’s 2050 net-zero pathway plan, hydrogen supply is set to account for 9%–12%.

Market data is even more astonishing: the global green hydrogen market was valued at about $1.1 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 61.1%, reaching $30.6 billion by 2030. Fuel cell electric vehicles and the power industry are the fastest-growing segments.

Explosion in project investments

According to Darcy Partners, a technology intelligence firm, in 2023, a total of 1,418 hydrogen projects were announced worldwide, with a total investment of $570 billion—up 31% from the previous year. This growth rate is already exponential.

Two Major Risks That Cannot Be Ignored

First risk: Industry competition is intensifying

As market enthusiasm rises, more and more companies are entering the hydrogen sector, vying for market share. This puts enormous pressure on leading companies. Take Plug Power as an example: in price wars with competitors, profits are directly eroded, and stock performance worsens. Investors need to continuously monitor how these companies respond to competition—technological innovation and cost management will be key.

Second risk: Production costs remain a major issue

Although technological advances have made hydrogen production relatively more economical, much of the current production still relies on fossil fuels. This not only limits the environmental benefits but also causes hydrogen prices to be closely linked to oil prices. When oil prices rise, hydrogen production costs also increase, impacting market competitiveness.

Weighing Three Investment Approaches

Method 1: CFD Trading

Predicting price movements to trade without directly holding stocks. Features include high leverage, flexible trading, suitable for short-term speculation. But risks are high—losses can quickly escalate.

Method 2: Direct Stock Purchase

The most traditional and stable approach—investors directly hold hydrogen energy concept stocks. Relatively prudent, but requires more capital and offers limited returns. Suitable for risk-averse investors.

Method 3: Investment Funds or ETFs

Diversified investment through hydrogen funds or ETFs (such as Global X Hydrogen ETF HYDR, Direxion Hydrogen ETF HJEN). These cover stocks across the US, Europe, and Japan in industrial and materials sectors, including hydrogen production, storage, transportation, fuel cells, and electrolyzer equipment. Suitable for investors sensitive to risk but wanting to participate in industry growth.

Full Industry Chain of Hydrogen Energy: Three Layers

Upstream Hydrogen Production: Green hydrogen is the future

Current hydrogen production methods are classified into three types: gray hydrogen (from fossil fuels, highest carbon emissions), blue hydrogen (with carbon capture technology to reduce emissions), and green hydrogen (produced via electrolysis using clean energy, truly zero-carbon). The proportion of green hydrogen will inevitably increase significantly in the future, making it a key part of the entire industry chain.

Midstream Storage and Transportation: Infrastructure is a bottleneck

Large-scale hydrogen storage best utilizes salt caverns or rock caverns combined with pipeline transportation—cost-effective and feasible but limited by natural conditions. For transportation, high-pressure gaseous hydrogen, cryogenic liquid hydrogen, and pipeline transport coexist, with high-pressure gas currently being mainstream. The number and distribution of refueling stations directly affect storage and transportation costs, which also constrain industry development.

Downstream Applications: Transportation has the greatest potential

Hydrogen’s applications are broad—transportation, industrial manufacturing, power generation, and energy storage. Among these, transportation is widely regarded as the most promising growth area, potentially becoming the largest future growth point.

Looking at the entire industry chain, the investment logic mainly focuses on two segments: upstream green hydrogen manufacturing and downstream transportation. These two links have stronger growth logic and expansion potential.

Final Judgment: Is 2025 Worth Investing?

Worth paying attention to, but with caution

Hydrogen energy is indeed the future direction of the energy industry. Policy support, market demand, and investment enthusiasm all indicate this. Governments worldwide are promoting development through tax credits and infrastructure investments. Some companies in the hydrogen concept stocks are showing excellent performance in technological innovation and cost management.

But investment requires strategy

The key is to choose the right investment approach and targets. If you prefer stability, direct stock purchase or investment funds are more suitable; if you can tolerate volatility, CFD trading may offer more profit opportunities. Regardless of the method, focus on companies that are dedicated to green hydrogen infrastructure, possess core technologies, and have cost competitiveness.

At the same time, do not overlook risks—industry competition intensifies, production costs are linked to oil prices, and most companies are still operating at a loss. These are factors that must be fully considered before investing.

Hydrogen energy concept stocks indeed represent the future of energy, but whether 2025 is the right investment timing for you depends on your risk tolerance and investment horizon. Long-term investors can consider deploying, while short-term traders should be cautious to avoid getting caught in a downturn.