Nel ASA Rides Plug Power's Coattails and AI Hype, but Orders Fail to Keep Pace

Norwegian electrolyser maker Nel ASA sees shares soar amid AI data centre green power demand, but analysts remain bearish with no buy ratings and a 12-month price target below current level.

A surprise earnings beat from Plug Power has lit a fire under the beleaguered hydrogen sector, and few stocks are burning brighter than Nel ASA. The Norwegian electrolyser maker saw its shares jump 20% in a single session on Thursday, climbing to 2.61 Norwegian kroner in Oslo. Over the past month, the stock has surged nearly 39%, while its year-to-date return in euros now stands at over 45%. The trigger: Plug Power’s stronger-than-expected quarterly sales, which eased fears that near-term profitability in the industry remains a pipe dream. Investors are betting that the insatiable appetite of AI data centres for green baseload power will turn hydrogen into a multibillion-euro market.

The rally has a distinct technology flavour. Nel is pinning its long-term case on a new PEM platform that it claims can slash stack-level costs by roughly 70%. A prototype is scheduled for 2026, and the company is already commercialising a pressurised alkaline electrolyser platform that it brought to market in May 2026. For that alkaline system, Nel is targeting capital-expenditure savings of between 40% and 60% compared with current solutions. Heavy industrialisation in Herøya is bankrolled by up to €135 million from the EU Innovation Fund, covering as much as 60% of eligible costs, with an initial annual capacity target of one gigawatt. An additional €11 million in EU cash is expected to land in the second quarter.

Yet the bullish narrative stops at the factory gate. The consensus among analysts remains firmly on the sell side: the average 12-month price target is just 2.12 Norwegian kroner, well below Thursday’s closing level, and not a single broker has a buy recommendation. Seven analysts rate the stock a sell. That yawning gap between market euphoria and institutional caution has made the recent price action all the more conspicuous.

The company’s own cost-cutting drive has come at a price. Nel has shrunk its workforce by 26% from the peak to roughly 300 employees, trimming personnel expenses by a fifth. That has improved liquidity, but it has also sapped operational flexibility. Management concedes that if demand suddenly picks up, the company could struggle to ramp up production as quickly as before the cuts. Some research funds for the PEM business have remained unpaid since the end of last year, adding further strain to cash flow.

The real headache, however, is the order book. At the end of the first quarter, Nel had 1.4 billion kroner in cash and an order backlog of 1.1 billion kroner—insufficient, by the company’s own admission, to ensure meaningful capacity utilisation in 2027. Fresh contracts are urgently needed this year, particularly for modular PEM units and larger projects in Europe and North America. While the pipeline of talks includes projects in the 50? to 150?megawatt range, the market is waiting to see those negotiations converted into signed agreements.

All eyes now turn to the second-quarter results, due on 15 July, when CEO Håkon Volldal will present the numbers. Investors will be looking for concrete evidence of order momentum and a clearer path to filling the production lines. Until then, the shares are being driven largely by hope—a hope that hydrogen’s AI moment will prove more than a speculative flash in the pan.