Nel ASA's Technology Advances and AI Tailwinds Lift Shares, but Orders Remain the Decisive Hurdle

Nel ASA shares jump 47% to €0.28 despite oversold RSI of 15.6. Analysts are bearish, with no buy ratings, as the company cuts 26% of staff and faces a thinning order book, while EU grants and new electrolyser tech offer limited hope.

Nel ASA has staged a striking rally this year, climbing roughly 47% to trade at €0.28, yet the underlying business narrative tells a far more cautious story. A relative strength index of 15.6 points to a deeply oversold condition, suggesting that while the stock has found buyers, the buying pressure may be coming more from sentiment than substance. The optimism stems partly from a broader wave of AI-driven enthusiasm, after US peer Plug Power surprised markets with solid quarterly revenues, calming fears about near-term profitability in the hydrogen space. Investors now see giant AI data centres as a potential new source of demand for green hydrogen as a baseload power source, a narrative from which Nel is benefiting.

On the operational front, the Norwegian company is pushing forward with technology that could drastically lower costs. In May it began commercial sales of a new pressurised alkaline electrolyser platform, capable of producing hydrogen at high pressure while cutting project costs to under $1,450 per kilowatt for medium-sized installations — roughly half the industry norm. Looking further ahead, management is developing a next-generation PEM platform intended to reduce stack costs by as much as 70%. A prototype is due this year, although series production remains years off. In the meantime, Nel must sustain itself with its current product line.

A rare concrete win came from the US, where utility DCPUD purchased an electrolyser for a project in Washington State that will use surplus hydropower to produce green hydrogen. The unit is scheduled to start operating in the first half of 2027. That single order, however, does little to fill the company’s broader pipeline. Meanwhile, the European Union is providing financial support: Nel has secured a three-digit million-euro grant to expand its Herøya factory, aiming to push annual production capacity to four gigawatts. An additional €11 million in EU funding is expected in the second quarter.

Analysts remain broadly unconvinced. Not a single one currently recommends buying the stock, and the average price target hovers around 2.12–2.14 Norwegian kroner. Berenberg recently trimmed its own target, citing weak order intake. The company has responded by slashing its workforce by 26% to roughly 300 employees, a move that has reduced payroll costs but also trimmed the operational muscle needed to handle a sudden uptick in demand. Management has warned that the capacity cuts could leave the company struggling to scale up if new orders arrive quickly.

Financially, Nel ended the first quarter with cash reserves of 1.4 billion kroner, providing a buffer. But the order book is thinning, and the company faces a real risk of underutilisation at its factories in 2027 unless new contracts materialise. Moreover, some of the anticipated research funding for the PEM business has gone unpaid since the end of last year, adding pressure to cash flow.

All eyes now turn to July 15, when CEO Håkon Volldal will present the half-year results. The market will be looking for fresh orders from the US or Europe to justify the rally. Without concrete revenue visibility, the stock’s advance rests largely on hope — and the gap between a promising technology roadmap and a near-empty order book is growing harder to ignore.