The £1 Billion Hydrogen Bet That Hinges on a Single June Decision

ITM Power shares rally 365% in a year, but dilution and a £120M Chronos decision in June pose a make-or-break moment for the hydrogen firm.

ITM Power’s stock has been on a tear that has left analysts scrambling to keep up. The shares have surged 365 percent over the past year and roughly 134 percent since January alone, pushing the company’s market valuation past the £1 billion mark. Yet beneath the surface of this rally lies a story of dilution, widening expectations, and a make-or-break investment decision scheduled for June.

The London-listed hydrogen specialist updated the market on Thursday with a routine capital disclosure that revealed a stark reality: the number of outstanding shares has ballooned to approximately 691 million. That marks a significant increase from the roughly 617 million shares in circulation back in May 2024. The dilution stems from a mix of government investment injections and generous management incentive schemes. Chief executive Dennis Schulz received a multi-million-pound equity package in mid-April, tied to strict performance targets including profitable contract wins and progress on the company’s flagship Hydropulse and Chronos projects.

A Rally Without Company-Specific News

Despite the dilution, the market’s attention has been fixed elsewhere. On Xetra, the stock jumped nearly 15 percent in pre-market trading on Thursday, hitting an intraday high of €1.71. Trading volumes surged past 868,000 shares — more than double the daily average. The move came without any specific corporate announcement. Instead, a broad wave of sector optimism around electrolyser manufacturers has been lifting the entire industry. Over the past six months, ITM Power has outperformed the wider UK market by 75 percent.

The technical picture reinforces the strength of the trend. The relative strength index has climbed to 70.88, signalling overbought conditions, but the average directional index stands at 53.57, suggesting the uptrend remains structurally intact. The stock now trades far above its 50-day moving average of €0.898, and the 30-day average trading volume of roughly 356,000 shares has been consistently exceeded in recent sessions.

The June Inflection Point

The real catalyst for the stock’s trajectory, however, is not a quarterly earnings report but a pair of decisions expected in June. First, the company will make its final investment decision on the new Chronos manufacturing line. The facility in Sheffield is designed to produce PEM electrolysers with double the power density at significantly lower costs, targeting a capacity of one gigawatt by 2028. The total investment required stands at £120 million.

Second, a decision on a state subsidy of £46.5 million is due in June. The application was submitted on April 7 under the UK’s Subsidy Control Act. If approved, the grant will be contractually secured, providing a substantial boost to the Chronos project’s economics.

Record Revenue, Persistent Losses

Operationally, the picture is improving but remains firmly in the red. In the first half of the 2026 fiscal year, ITM Power posted record revenue of £18 million. Management has raised its full-year guidance to between £40 million and £43 million. The order book stands at £152 million, with 71 percent of contracts now considered profitable — a notable improvement from earlier loss-making projects.

Yet the company is still burning cash. The operating loss is expected to land around £29 million to £30 million for the full year. On the balance sheet, cash reserves of nearly £198 million provide a cushion. Analysts at Morgan Stanley estimate the enterprise value at £993 million in a base-case scenario and note that net liquidity covers the current cash burn rate roughly five times over.

Expanding Beyond Hydrogen

ITM Power is also diversifying its revenue streams. In Germany, the company has agreements with RWE and the Stablegrid Group for projects totalling more than 710 megawatts. A strategic partnership with Rheinmetall, announced in April, targets the development of synthetic fuel production for the defence sector under the Giga-PtX project. The plan envisions a network of decentralised facilities with electrolysis capacities of up to 50 MW per site, supplying NATO forces across Europe.

The analyst consensus price target stands at 84.60 pence, while the stock currently trades at 154.80 pence. Whether the June investment decision on Chronos can bridge that gap and justify the premium valuation will be the defining test for ITM Power’s growth narrative. For now, the market is betting big that it will.