What Happened?
Shares of carbonate fuel cell technology developer FuelCell Energy (NASDAQ:FCEL) jumped 17.8% in the afternoon session after the Biden administration announced new rules clarifying that some nuclear power plants can secure tax credits for producing clean hydrogen if the credits help keep reactors running. This announcement means more funding opportunities for hydrogen producers despite some opposition from environmental groups regarding the use of nuclear to produce hydrogen. The update also provides more certainty for investors and related companies within the clean energy space.
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What The Market Is Telling Us
FuelCell Energy’s shares are extremely volatile and have had 93 moves greater than 5% over the last year. But moves this big are rare even for FuelCell Energy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 11.6% on the news that the company reported strong second-quarter earnings results. FuelCell Energy blew past analysts' revenue expectations. That adjusted EBITDA and EPS came in line with expectations was comforting. On the other hand, its backlog missed.
On a more positive note, backlog grew 12% y/y, signaling the potential for the declining revenue growth to reverse in the coming quarters. In addition, the company provided some encouraging updates regarding the demand side of the equation as it plans to diversify its offerings given growing opportunities from AI-driven data centers. Overall, this quarter seemed fine.
FuelCell Energy is up 15.9% since the beginning of the year, but at $12.02 per share, it is still trading 73.3% below its 52-week high of $45.00 from February 2024. Investors who bought $1,000 worth of FuelCell Energy’s shares 5 years ago would now be looking at an investment worth $194.42.
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