The hydrogen sector is telling two wildly different stories right now. Bloom Energy has effectively broken away from the pack, propelled by AI data center demand that sent its quarterly revenue to $751 million and its stock up more than 200% year to date. Nel ASA has caught some of that updraft — its shares closed on Friday at EUR 0.30, a 42% gain over the past month — but the underlying fundamentals tell a far more sobering tale.
The rally has brought the stock within striking distance of its 52-week high of EUR 0.32, a recovery from the EUR 0.18 trough. Yet the relative strength index of 32.2 suggests the recent correction has left the shares technically bruised without reaching outright oversold territory. The momentum is clearly sector-driven rather than company-specific, with Bloom’s explosive numbers spilling over into the broader hydrogen space.
Orders hit a three-quarter wall
Nel’s own operating performance offers little to justify the recent price action. First-quarter order intake amounted to just 85 million Norwegian kroner — a 73% decline year-on-year. The order book shrank to roughly 1.1 billion kroner, leaving the company with limited revenue visibility. Revenue and other income reached 152 million kroner, while EBITDA came in at negative 100 million kroner, albeit an improvement of 15 million kroner from the prior-year period.
A lingering overhang is the delayed research funding from the U.S. Department of Energy, with no clear timeline for resumption. Nel’s cash position of around 1.4 billion kroner provides a buffer, but it cannot compensate indefinitely for weak commercial traction.
PEM contract and EU cash offer bright spots
Not everything is grim. Nel secured an order from the Douglas County Public Utility District in Washington state — the first time a public utility has bought the company’s PEM electrolyser technology. The system will convert surplus hydropower into green hydrogen to help stabilize the grid and reduce turbine maintenance costs. The stacks will be built at Nel’s Wallingford, Connecticut facility, with commissioning slated for the first half of 2027.
A smaller follow-on order worth around $7 million from Mesure Process, part of the Synqo-Energies group, added to the pipeline.
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On the financing front, the EU Innovation Fund has earmarked up to €135 million to support Nel’s capacity expansion, covering as much as 60% of eligible investment and operating costs. A first milestone-linked tranche of more than €10 million is expected in the current quarter. That injection could provide short-term support to the share price.
Herøya expansion and the credibility test
Nel has taken a final investment decision for 1 gigawatt of production capacity at Herøya, with roughly 300 million kroner in capital spending before grants. The first 500 megawatts are due to come online by year-end. The company’s new pressurised alkaline platform, launched commercially in May after eight years of development, is positioned to offer lower investment costs per megawatt and better cycle times than conventional alkaline or PEM systems.
Chief executive Håkon Volldal points to ongoing discussions with potential customers for projects in the 50 to 150 megawatt range across Europe and North America. The challenge is converting technology interest into binding orders.
Analysts remain unconvinced
The gulf between market pricing and analyst expectations is stark. Berenberg has cut its price target to 2.30 Norwegian kroner from 2.60, and Citigroup lowered its to 2.40 kroner. The consensus target sits at around 2.21 kroner, well below the Oslo closing price of 3.22 kroner — a gap of more than 30%. That discrepancy signals that analysts are demanding concrete large-scale contracts before they revise their views upward.
The stock is effectively pricing in hope that Nel will turn its pipeline into firm commitments. The next major checkpoint comes on July 15, when the company reports first-half results. Until then, the shares remain caught between sector-wide momentum and the harsh reality of a 73% drop in new orders.
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