ITM Power at a Crossroads: Grant Decision Looms as Retail Traders Cash In on Surge

Hydrogen electrolyser maker ITM Power saw shares jump 5.76% on heavy trading, but most retail investors sold. Key catalyst: UK grant decision on 1-GW Sheffield plant due same day.

The busiest week in ITM Power's recent history kicked off with a paradox. On Tuesday May 26, the hydrogen electrolyser maker saw its shares surge nearly six per cent on explosive trading volumes — yet the majority of retail investors on Interactive Investor were sellers. Only 45 per cent of trades on that platform were buys, suggesting a significant chunk of private shareholders used the strength to trim positions.

The session was anything but isolated. ITM Power’s stock opened at 172.20 pence, hit an intraday high of 189.40 pence and closed at 180.00 pence, a gain of 9.80 pence or 5.76 per cent from the previous close of 170.20 pence. Volume reached 9.58 million shares, building on elevated activity in preceding days — 6.64 million on May 19 and 8.50 million on May 22. The stock rubbed shoulders with heavyweights like Rolls-Royce, Lloyds Banking Group and Glencore on the most-traded list at Interactive Investor, an unusual spot for a pure-play hydrogen name.

What made the move notable was the absence of a company-specific catalyst. No ad-hoc announcement, no contract win, no partnership. The momentum appeared to stem entirely from positioning around the broader green hydrogen theme. For the day, the verdict from the retail crowd was clear: sell into strength.

But the real binary event for ITM Power was unfolding off the trading screen. The UK energy ministry had given the green light for a capital grant decision on a fully automated 1-gigawatt manufacturing line in Sheffield. The ruling was expected later on May 26 itself. The line will produce the new Chronos generation of electrolysers, each delivering 2 megawatts — three times the output of the current system — at a 40 per cent cost reduction and half the footprint. Commercial operation is targeted for 2028. Management has indicated it will give final investment approval immediately after a positive decision.

Jefferies has warned that a negative outcome could trigger a share price decline of up to 52 per cent, underscoring the stakes.

The grant decision is part of a dense calendar of events that also includes ITM Power’s entry into the MSCI United Kingdom Small Cap Index on May 29. Passive funds will be forced to buy the stock, boosting volumes and raising its profile among international investors.

Beyond Sheffield, the company is deepening its ties with the defence sector through a partnership with Rheinmetall on the Giga-PtX project. The plan is to build a Europe-wide network of decentralised synthetic fuel plants for NATO forces. Each facility will house up to 50 megawatts of electrolysis capacity and produce between 5,000 and 7,000 tonnes of e-fuel annually. Several hundred units are envisaged, with an initial focus on the UK. Rheinmetall is also working with Germany’s Sunfire on alkaline electrolysis, Ineratec on Fischer-Tropsch technology and Greenlyte Carbon Technologies on direct air capture. The move transforms ITM Power from a civilian hydrogen developer into a potential NATO supplier, opening a multibillion-pound market beyond conventional hydrogen.

On the commercial side, ITM Power is supplying six Poseidon modules of 20 megawatts each for Uniper’s Humber H2ub project in Killingholme, with a final investment decision due in 2026 and ramp-up from 2029. A separate 150-megawatt capacity reservation with RWE and contracts for over 710 megawatts in Germany add further visibility.

Financially, the company is making progress. Half-year revenue hit a record £18 million, and the full-year outlook for fiscal 2026 stands at £40 million to £43 million — a 35 per cent increase year-on-year. The adjusted EBITDA loss narrowed from £16.8 million to £11.9 million, though the pre-tax loss for the year ended April 2025 widened to £45.4 million. Liquidity remains solid at £210 million to £215 million year-end cash, supported by funds from Great British Energy.

Analyst views span a wide spectrum. Morgan Stanley upgraded the stock to Overweight with a 170 pence target. Jefferies raised its target to 200 pence and reiterated Buy, citing improved earnings prospects. UBS remains sceptical. Of eleven analysts covering the stock, seven recommend Buy, four say Hold and one advises Sell. The spread between the most bullish and bearish targets reflects the binary nature of the coming days — grant outcome, index rebalancing and the credibility of the defence pivot will all be priced simultaneously.

For ITM Power, May 26 was a microcosm of the tensions ahead: a momentum-driven rally colliding with retail profit-taking, while a government decision that could reshape the company’s future hung in the balance. Whether the elevated volumes persist beyond this week will reveal whether the hydrogen trade has lasting institutional backing — or whether this session was a one-off outlier.