Nel ASA Defies Mixed Q1 Numbers as Defence Pivot and EU Cash Fuel a 17% Rally

Nel ASA shares hit a 52-week high despite shrinking revenue, as cost-cutting narrows losses and a new defense strategy, EU funding, and upcoming electrolyser launch fuel investor optimism.

Investors are betting big on Nel ASA’s transformation, sending the Norwegian hydrogen specialist’s shares surging nearly 17% on Thursday to €0.28 — a fresh 52-week high — despite a quarterly report that showed shrinking revenue and a 24% drop in the order backlog. The stock has now climbed roughly 47% over the past month, leaving sector peers trailing in the dust.

The rally places Nel firmly ahead of competitors such as Ballard Power Systems, which managed only a 3% gain over the same period, while Siemens Energy has barely budged. Market observers point to a structural recovery taking shape across the hydrogen space, with analyst Maximilian Berger describing the narrowing losses as a clear buy signal that has triggered a technical breakout.

Losses Narrow as Cost-Cutting Bites

Nel’s net loss for the first quarter of 2026 shrank to NOK 144 million from NOK 179 million a year earlier, while EBITDA improved by NOK 15 million to minus NOK 100 million. Revenue from customer contracts slipped 5% to NOK 148 million, and the order book contracted to NOK 1.1 billion.

Behind those figures lies a determined cost-cutting drive. Management has slashed the workforce by roughly a quarter and stabilised the cost base. CEO Håkon Volldal has also secured external financial support: the company has lined up EU grants of up to €135 million, earmarked for infrastructure expansion and expected to cover about 60% of eligible costs for a major technology upgrade.

Defence Angle Opens a New Front

Nel is repositioning itself as a provider of energy security and defence solutions, a strategic shift that Volldal says reflects a fundamental rethinking of energy systems. Disruptions to shipping through the Strait of Hormuz have put pressure on global liquefied natural gas markets, prompting companies to explore alternatives — and green hydrogen is moving up the agenda.

“We need to reconsider our energy system,” Volldal said, noting that decentralised hydrogen solutions are drawing growing interest from defence and infrastructure projects. The new direction is already attracting attention: after the quarter closed, Nel’s PEM division signed a USD 7 million order for container-based electrolysers, with deliveries slated to supply European hydrogen refuelling stations and industrial customers from 2027.

The May 6 Test

All eyes are now on May 6, when Nel plans to unveil a new generation of pressurised alkaline electrolysers. The platform promises 40% to 60% lower capital expenditure and 10% to 20% lower operating costs — a step-change that Volldal describes as the concrete test of the company’s new strategy.

The upgrade carries a price tag of around NOK 300 million, but EU funding should cover a significant portion. The order intake for Q1 stood at NOK 85 million, a quiet period that Volldal acknowledged, though he added: “The dynamics in the PEM division continue — we expect several orders before the end of the first half.”

The alkaline division has meanwhile posted moderate growth, providing stability to the core business. But with the order book shrinking, the pressure is on the new platform to convert investor enthusiasm into tangible contracts. The stock’s elevated volatility — above 78% — reflects the market’s nervousness, though Thursday’s leap to a new high has given buyers a strong argument. If support at €0.24 from the previous session holds, further technical targets could come into view.