Nel ASA’s PEM Win Offers a Glimmer, But the Order Book Tells a Grimmer Tale

Nel ASA stock surges 59% YTD to €0.30, but Q1 2026 reveals 73% order collapse; cost cuts and a new electrolyzer platform fuel cautious optimism.

Nel ASA’s stock has been on a tear, hitting a new 52-week high of €0.30 and notching a 59 percent gain since the start of the year. But the rally is running on fumes of cost-cutting optimism, not a recovery in demand. The numbers from the first quarter of 2026 paint a starkly different picture.

New orders collapsed by 73 percent to just 85 million Norwegian kroner, dragging the total backlog down 24 percent to 1.11 billion kroner. Revenue slipped 5 percent to 148 million kroner. The company has responded by slashing roughly a quarter of its workforce, a move that helped narrow the net loss to 144 million kroner from 179 million a year earlier. Personnel costs fell 21 percent year-on-year.

That cash conservation is critical. Nel holds around 1.4 billion kroner in reserves, enough, management says, to fund operations through the end of 2026. An additional boost is expected in the second quarter: an 11 million euro payment from the EU Innovation Fund.

A New Platform, and a Potential Write-Off

On May 6, Nel unveiled its next-generation pressurized alkaline electrolyzer system in Herøya, eight years in the making. CEO Håkon Volldal called it a “milestone for the entire electrolyzer segment.” The company claims the new platform will require 80 percent less space, cut capital expenditure by 40 to 60 percent, and reduce operating costs by 10 to 20 percent. Energy consumption is expected to fall below 50 kilowatt-hours per kilogram of hydrogen.

The first gigawatt of production capacity will cost roughly 300 million kroner before grants. An EU milestone grant is expected to unlock an initial payment of more than 10 million euros. The first 500 megawatts of capacity should be operational by the end of 2026, with series deliveries starting in 2027.

But the new platform raises an uncomfortable question: what happens to the two 500-megawatt atmospheric alkaline production lines in Herøya that are currently idle? Whether they will be restarted, closed, or sold remains unclear. An impairment charge is possible, adding to the 799 million kroner in write-downs already booked in fiscal 2025.

PEM Wins Offer a Taste of a New Strategy

Amid the broader demand drought, Nel’s PEM division has delivered two modest but symbolic wins. Douglas County Public Utility District in Washington state ordered electrolyzers to use surplus hydropower for hydrogen production and grid stabilization. Separately, Mesure Process, a subsidiary of Synqo Energies, ordered containerized units for a European hydrogen refueling station project. Both contracts are worth around $7 million each.

The Douglas County deal is a first for Nel: a public utility will operate the equipment. The plant is slated to begin production in the first half of 2027, using excess hydropower to make hydrogen. These projects signal a shift in positioning — hydrogen as an energy security tool, not just a climate solution.

The Rally vs. The Analysts

The stock’s 52-week high stands in sharp contrast to analyst sentiment. Berenberg cut its price target to 2.30 kroner, and Citigroup lowered its to 2.40 kroner, both citing valuation risks despite improved market sentiment. The consensus rating among analysts leans toward “Sell,” with an average target of just 2.14 kroner.

The market is betting that cost cuts and the new platform will eventually reignite demand. The next reality check comes on July 15, when Nel publishes its half-year results. By then, investors will know whether the technology reveal can translate into commercial traction — or whether the empty order book is a more honest signal.