What Happened?
Shares of carbonate fuel cell technology developer FuelCell Energy (NASDAQ:FCEL) fell 3% in the morning session after automotive manufacturer Stellantis announced it was discontinuing its hydrogen fuel cell technology development program.
The move by the major automaker, which owns brands like Vauxhall, Peugeot, and Citroen, casts a shadow over the near-term viability of the hydrogen fuel cell market. Stellantis cited significant headwinds, including a lack of refueling infrastructure, high capital needs, and insufficient consumer incentives, stating it does not expect hydrogen-powered light commercial vehicles to gain meaningful market traction before the end of the decade. This decision represents a significant sentiment shift from a major industrial player and is creating headwinds for companies across the hydrogen and fuel cell ecosystem. While FuelCell Energy is not directly involved with Stellantis, the announcement raises broader questions about the pace of hydrogen adoption and the development of necessary infrastructure, which are critical for the growth of the entire sector. The news appears to be outweighing other positive developments in the space, such as trials of hydrogen-powered equipment at ports.
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What Is The Market Telling Us
FuelCell Energy’s shares are extremely volatile and have had 91 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 1 month ago when the stock gained 10.7% on the news that the major indices rebounded (Nasdaq +1.5%, S&P 500 +1.0%) as reports pointed to easing tensions between Israel and Iran.
The Wall Street Journal said senior Iranian officials had signaled a willingness to restart stalled nuclear talks, on the condition that Washington refrain from joining Israel's ongoing strikes. This development triggered a significant decline in oil prices, easing inflation concerns.
FuelCell Energy is down 52.4% since the beginning of the year, and at $4.94 per share, it is trading 76% below its 52-week high of $20.60 from July 2024. Investors who bought $1,000 worth of FuelCell Energy’s shares 5 years ago would now be looking at an investment worth $53.61.
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