What Happened?

Shares of fuel cell technology Plug Power (NASDAQ: PLUG) jumped 20.8% in the morning session after it announced a new multi-year enhanced supply agreement with a major U.S.-based industrial gas partner. The agreement, which extends the partnership through 2030, is set to secure a reliable supply of liquid hydrogen for Plug Power's growing business. 

More importantly for investors, the deal will immediately lower costs and is expected to improve the company's cash flow and margin profile. Plug Power, a leader in hydrogen fuel cell technology, has been focused on scaling its operations and achieving profitability. This extended agreement is a crucial step, ensuring a stable hydrogen supply for its more than 275 customer sites while also addressing cost-efficiency, a key concern for the company. CEO Andy Marsh called the contract a "win for Plug, our customers, our suppliers and our margin profile," highlighting the immediate cost reduction benefits.

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What Is The Market Telling Us

Plug Power’s shares are extremely volatile and have had 101 moves greater than 5% over the last year. But moves this big are rare even for Plug Power and indicate this news significantly impacted the market’s perception of the business.

Plug Power is down 22.8% since the beginning of the year, and at $1.80 per share, it is trading 46.1% below its 52-week high of $3.34 from July 2024. Investors who bought $1,000 worth of Plug Power’s shares 5 years ago would now be looking at an investment worth $201.04.

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