Nel ASA's 50% Rally Defies a 73% Order Collapse — Technology and Cash Provide Cover

Nel ASA shares rally 50% YTD but Q1 orders collapse 73%; short sellers trim positions; technology roadmap advances with alkaline and PEM electrolysers.

Nel ASA shares have staged an eye-catching recovery, climbing 50.23% since the start of the year and trading at €0.29 after a 42.57% surge over the past month. Yet beneath that momentum lies a stark disconnect: first-quarter orders collapsed by 73% to just 85 million Norwegian kroner, while the order book shrank 24% to 1.113 billion kroner. The stock now sits roughly 9% below its early-May high, with a relative strength index of 27.9 — technically oversold territory.

Short sellers trim positions, but the signal is modest

Norway's financial watchdog, Finanstilsynet, recorded a drop in disclosed short positions against Nel to 1.13% of outstanding shares as of May 21, a decline of 0.14 percentage points from the previous update. Over a longer timeframe, net short exposure has fallen by half a percentage point. While any retreat from bearish bets can ease technical pressure, the level remains well below that seen in heavily shorted Norwegian names such as Link Mobility Group Holding or Hexagon Composites. For a stock with annualised 30-day volatility of 93.54%, even marginal positioning shifts can amplify price swings.

Technology roadmap gathers steam

Nel is pushing ahead on two electrolyser fronts. Its pressurised alkaline platform, already commercially launched, targets scale at the Herøya facility — initially 1 gigawatt of annual capacity, with plans to eventually reach 4 GW. The company expects to receive an EU grant of €11 million in the second quarter of 2026 to support that industrialisation, part of a broader Innovation Fund framework of up to €135 million covering as much as 60% of eligible costs.

On the PEM side, Nel aims to build a prototype stack this year, targeting a 70% reduction in stack-level costs. Lower capital and operating expenses could make electrolysis projects more viable, though the commercial timetable remains vague and broad industrialisation is likely years away. In the nearer term, modular PEM systems of 2.5 to 50 megawatts — deliverable in under 12 months — are driving the order flow. A follow-up purchase order in April for containerised PEM units worth $7 million (roughly 70 million kroner) was the first second-quarter booking.

First-quarter numbers reveal trade-offs

Nel's Q1 revenue from customer contracts fell 5% year-on-year to 148 million kroner, while EBITDA came in at minus 100 million kroner. The decline in both orders and backlog underscores the cautious investment climate in green hydrogen. However, the company's cash position of 1.443 billion kroner provides a cushion for the ongoing technology spend.

Management has trimmed headcount to around 300, a 26% reduction from peak levels and 19% lower than the year-ago quarter. Personnel costs dropped 21%. The downside: production and project execution capacity have been curtailed, limiting Nel's ability to ramp up quickly if demand snaps back.

Geopolitical and operational headwinds

Project delays continue to plague the sector. Nel has flagged that tensions in the Middle East are hampering some regional initiatives, while materials costs remain volatile. Inflation is not seen as persistently elevated, but certain markets are feeling pressure. On a brighter note, a reference project in South Korea — a 10-megawatt off-grid green hydrogen facility — reached commercial operation in late March, bolstering the company's credibility.

The next catalyst

All eyes are now on Nel's half-year report, due July 15. Until then, order intake in the electrolyser business will be the decisive metric. New bookings would make capacity utilisation from 2027 more tangible; without them, the technology roadmap remains larger than the near-term commercial reality. The short-interest retreat offers a modest tailwind, but the underlying story hinges on converting pipeline promise into contracted revenue.