Nel ASA’s May 6 Product Reveal Could Decide Whether the Defence Pivot Has Legs

Nel ASA's Q1 revenue and orders fell sharply, but a shift toward defence and energy security, plus a new electrolyser platform due May 6, has boosted the stock 26% in a month.

The Norwegian electrolyser maker is threading a needle. Nel ASA’s first-quarter numbers landed with a thud — revenue slipped, orders cratered and the backlog shrank — yet the stock has rallied nearly 26% over the past month. Investors are betting that a strategic pivot toward defence and energy security, coupled with a next-generation platform due on May 6, can reverse the slide before it becomes a trend.

Mixed Q1 Masks a Deeper Reorganisation

Nel’s Q1 2026 results were a study in contrasts. Revenue from customer contracts fell 5% year-on-year to NOK 148 million, while order intake collapsed 73% to just NOK 85 million. The order backlog dropped 24% to NOK 1.1 billion, underscoring the demand vacuum the company is trying to fill.

The bright spots were on the cost side. The net loss narrowed to NOK 144 million from NOK 179 million a year earlier, and EBITDA improved by NOK 15 million to minus NOK 100 million. Management has cut headcount by roughly a quarter, stabilising the cost base. The market rewarded the discipline: the stock gained about 7% on the day of the release and now sits near its 52-week high, trading at around EUR 0.28 — up roughly 45% since the start of the year and well above its 50-day moving average of EUR 0.20.

Geopolitics as a Growth Engine

CEO Håkon Volldal has been explicit about the strategic reset. “We need to rethink our energy system,” he said, pointing to decentralised hydrogen solutions as a natural fit for defence and critical infrastructure projects. The narrative is gaining traction: disruptions to shipping through the Strait of Hormuz have squeezed global LNG markets, pushing companies to explore alternatives — and green hydrogen is moving up the list.

Nel is leaning into this shift. The company now frames hydrogen as a geopolitical tool, not just an environmental one. That message resonated with investors even as the underlying order book weakened. The defence angle, combined with a broader push into energy security, has given the stock a narrative lift that the numbers alone couldn’t justify.

PEM Pipeline Offers a Glimmer of Hope

While the headline order intake was weak, the PEM division showed signs of life after the quarter closed. Nel secured a USD 7 million follow-on order from Mesure Process for container-based electrolysers, with delivery scheduled for 2027. The units will supply hydrogen to European refuelling stations and industrial customers.

Volldal struck a cautiously optimistic note: “The first quarter was quiet on order intake, but the momentum in the PEM business continues — we expect several more orders before the end of the first half.” The alkaline division, meanwhile, posted moderate growth and remains a stabilising force in the core business.

The May 6 Test: A New Platform With Big Promises

All eyes are now on May 6, when Nel will unveil a new generation of pressurised alkaline electrolysers. The company claims the platform will cut capital costs by 40% to 60% and operating expenses by 10% to 20% compared with current technology. The upgrade carries a price tag of roughly NOK 300 million, but EU grants of up to EUR 135 million could cover about 60% of eligible costs.

This launch is the defining test of Nel’s new strategy. The stock has already priced in optimism — now the technology needs to convert that enthusiasm into binding orders. If the platform can revive the order pipeline, the defence pivot will have real substance. If not, the shrinking backlog will become an urgent problem.

Broader Sector Tailwinds Provide Cover

Nel is not operating in isolation. The entire hydrogen and fuel-cell space has been electrified by Bloom Energy’s blockbuster Q1, which saw revenue double to USD 751.1 million and the annual guidance raised to USD 3.4–3.8 billion. Bloom’s success — driven by insatiable demand from AI data centres — has validated the thesis that on-site power generation is becoming critical infrastructure.

That halo effect has lifted Nel along with peers like ITM Power and Plug Power. ITM surged after announcing a defence-linked partnership with Rheinmetall for synthetic fuel production, while Plug Power rode the Bloom wave to a 12% gain on April 29. Nel’s own defence narrative fits neatly into this broader theme: electricity scarcity, energy security and decentralised generation are converging, and hydrogen is one of the few technologies that can address all three.

What to Watch in the Weeks Ahead

Nel’s market capitalisation stands at roughly NOK 4.2 billion — a fraction of Bloom Energy’s USD 80 billion-plus valuation, but a sign that investors see potential in the European electrolyser play. The next two weeks will determine whether that potential translates into momentum.

The May 6 platform launch is the immediate catalyst. If Nel can demonstrate credible cost reductions and secure early commitments, the stock’s recent rally will look justified. If the launch falls flat, the gap between the narrative and the numbers will widen. For a company that has cut costs, repositioned its strategy and bet its future on a single product reveal, the margin for error is razor-thin.