ITM Power’s Two-Day Surge Masks a Deepening Shift as Short Interest Crumbles and the Chronos Decision Looms

Hydrogen electrolyser specialist ITM Power rallies 17% in two sessions on short covering and prior funding/grant approvals, with analysts raising targets.

ITM Power’s shares have rocketed more than 17 per cent in two sessions, yet no fresh corporate announcement lies behind the move. By Thursday morning the stock stood at 213.40 pence, adding 9.6 per cent on the day after a 7.2 per cent gain the previous session. The rally has pushed the hydrogen electrolyser specialist’s market capitalisation to roughly £1.35 billion and stretched its 12-month advance to 324 per cent.

The buying, however, is not as one-sided as the price action suggests. On Interactive Investor, ITM Power ranked among the ten most-traded names on 26 May, but only 45 per cent of transactions were buys. By comparison, Scottish Mortgage and Melrose Industries posted far higher buy ratios in the same screen. More than 8.5 million shares changed hands on 27 May, with the intraday range spanning 180.71p to 196.00p. The elevated volume signals strong interest, but the mixed order flow leaves the rally’s immediate catalyst unclear.

What is clear is the retreat of short sellers. Aggregate disclosed short positions now total 1.77 per cent of ITM Power’s issued capital. Helikon Investments has trimmed its bet from 1.46 per cent in mid-May to just 0.97 per cent, while Qube Research & Technologies has fallen below the 0.5 per cent disclosure threshold set by the FCA and no longer appears in public records. The gradual unwinding of bearish wagers adds a mechanical tailwind to the share price, though the real underpinning lies in events that unfolded weeks ago.

The fundamental case for ITM Power was laid out in April. On 9 April the company announced a £40 million equity injection from Great British Energy, alongside a letter from the UK’s Department for Energy confirming its intention to award a £46.5 million grant. That money will bankroll the Chronos project — a fully automated gigawatt-scale manufacturing line. On 20 May the Competition and Markets Authority cleared the state aid, removing a regulatory hurdle. Since then the only filings have covered director shareholdings.

Analysts are now recalibrating their models to reflect the improved outlook. Jefferies lifted its price target from 115p to 200p while keeping a buy rating. Morgan Stanley sees ITM Power reaching EBITDA breakeven in the 2028 financial year, a full year earlier than previously expected. The company’s balance sheet provides a cushion: roughly £200 million in cash and zero debt, leading analysts to conclude that no fresh capital will be required this decade.

The financial metrics are strengthening. ITM Power raised its FY2026 revenue guidance in February to a range of £40 million to £43 million, representing an 11 per cent increase over the prior range — or a 35 per cent jump from the previous year when expressed in secondary sources. The first half alone delivered a record £18 million in revenue. The adjusted EBITDA deficit narrowed from £16.8 million to £11.9 million, and the order book stands at £152 million, with 71 per cent of contracts classified as high quality.

Chronos remains the headline catalyst. The final investment decision is expected in June. If approved, the line will produce 1 GW of electrolyser capacity annually. Separately, ITM Power’s role in supplying six 20 MW Poseidon modules for the first 120 MW phase of Uniper’s Humber H2ub project is moving closer to execution, and the collaboration with Rheinmetall on the Giga-PtX programme opens a military off-take market for synthetic fuels.

ITM Power is not the only hydrogen name catching a tailwind. Plug Power recently touched a 52-week high after its Q1 revenue rose 22 per cent to $163.5 million and its GAAP gross margin improved from minus 55 per cent to minus 13 per cent. SFC Energy booked a record 42.7 million euro defence order from Ukraine and raised its full-year revenue forecast. Yet the sector remains highly selective — the IEA notes that new technologies typically pass through euphoria and consolidation before viable projects emerge. ITM Power is one of the few names where real order books and public backing are translating into analyst upgrades and short-covering.

For investors watching the stock, the next 60 days are decisive. The Chronos go-ahead in June, the outcome of the UK’s second Hydrogen Allocation Round, and the company’s ability to convert its £152 million order book into recognised revenue will determine whether the current valuation has legs. The rally of the past two days may lack a news trigger, but the underlying narrative — falling short interest, rising revenue, and a near-term investment decision — provides more substance than a simple momentum spike.