Plug Power soars on planned collaboration with US data center developer, highlighting its “growing presence in the rapidly expanding” sector

Shares of Plug Power are jumping double digits as of 7:30 a.m. ET after the hydrogen fuel cell company announced that it “has signed a non-binding Letter of Intent to monetize its electricity rights in New York and one other location and collaborate with a US data center developer.”

Access to energy has emerged as the key bottleneck in the US AI boom, as recently highlighted by Nvidia CEO Jensen Huang and Microsoft CEO Satya Nadella.

Management highlighted that expanding Plug’s footprint in the “rapidly expanding data center sector” by offering backup power solutions is a priority for the company.

In October, HC Wainwright analyst Amit Dayal spotlighted Plug’s potential role in providing power to data centers, upping his price target to $7 from $3, the highest on Wall Street, which set off record call activity in the stock.

Amid rising energy demand, Plug’s offerings begin to look “increasingly price-competitive and case for adoption becomes stronger,” he wrote. Peer Bloom Energy has also cashed in on the AI boom, striking a deal to deliver power to some of Oracle’s data centers, which accelerated the stock’s surge.

In the press release, Plug also noted that it expects to generate more than $275 million in “liquidity improvement” through monetizing assets (like the aforementioned electricity rights in New York and elsewhere), the release of restricted cash, and lower maintenance expenses. Management added that they are suspending activities related to the Department of Energy loan program (which was going to be used to increase hydrogen production), saying that its July announcement for hydrogen supply reduced its need to produce more itself.

The company is slated to deliver its Q3 results today.