ITM Power: The Defence-Industrial Tug-of-War That Has Hydrogen Investors on Edge

ITM Power stock rallies on defence pivot, but losses persist; analysts split from 110p to 200p; Cromarty hydrogen project FID in Dec 2026 is pivotal.

When a company that builds electrolysers suddenly starts talking about “sovereign fuel capability” and “operational readiness”, the market takes notice—and then it argues about what it means. ITM Power’s stock has become a battlefield between two competing narratives: one that sees a hydrogen pure?play pivoting to the security?driven budgets of NATO, and another that counts the months until a single Scottish project must deliver credible revenue.

The shares closed at €1.46 on Thursday, shedding 2.93% on the day, yet the weekly picture still shows a 13.57% advance. That rally was ignited when Berenberg more than doubled its price target to 200 British pence from 110p, maintaining a buy rating. The catalyst: ITM Power’s strategic cooperation with Rheinmetall under the Giga?PtX programme. The plan calls for multiple e?fuel plants with roughly 50 megawatts of electrolyser capacity, capable of producing up to 7,000 tonnes of NATO?compatible synthetic fuels each year.

The partnership marks a fundamental break from the company’s traditional customer base. Instead of chasing industrial decarbonisation subsidies, ITM Power now has a foot in the door of defence budgets, which have historically proved more resilient and less cyclical. Morgan Stanley has also upgraded the stock, citing widening interest in ITM Power’s role across the hydrogen sector. Yet Goldman Sachs maintains a sell recommendation, and the gap between the most bullish and most bearish analyst targets remains extreme: current price objectives range from 110p to 200p, while the central fair?value anchor has crept up to only 131p.

The tension is visible in every technical indicator. The stock trades 43.52% below its 52?week high of €2.58 and roughly 16% beneath its 50?day moving average of €1.75. At the same time, it sits about 38% above its 200?day average of €1.06—a sign that the longer?term re?rating is real, but that short?term conviction is shaky. The annualised 30?day volatility of 114.51% underscores a market that is pricing headlines, not earnings. The relative strength index, at 45.6, offers no clear directional signal.

None of this changes the fundamental reality: ITM Power still posts losses. The bull case therefore rests on execution, not promise. Berenberg pins its optimism on the defence pivot unlocking a repeatable, large?scale deployment model. Supporting that thesis are the upcoming product platforms—Trident, Neptune, the Chronos line and the recurring?revenue Hydropulse model—which together aim to improve margins and cashflow visibility. The concrete near?term test, however, is the Cromarty green hydrogen project in Scotland, where partner Protium Green Solutions handles power supply, permitting and distribution infrastructure. The final investment decision is scheduled for December 2026. If it arrives on time and under favourable terms, it would validate ITM Power’s ability to convert memoranda of understanding into binding, revenue?generating contracts.

On the other side, Simply Wall St flags operational risks that hang over any forecast: irregular revenue recognition, factory underutilisation and the complexities of the build?own?operate model. The five?month gap until the Cromarty decision leaves the stock vulnerable to any piece of news—a tweet, an analyst note, a project delay—that tilts sentiment one way or the other. Even after Berenberg’s upgrade, the divergence among analysts shows that the market has not yet agreed on a single narrative for this stock.

What investors are left with is a binary?option trade dressed up as a growth equity. The next decisive move will likely come from the Scottish Highlands, not from a trading floor. Until then, ITM Power’s share price will continue to swing on the question that neither the defence deal nor the product pipeline has yet answered: can a money?losing hydrogen company turn political tailwinds into actual profit?