Motley Fool calls Plug Power a 'hidden AI power play', flags weak financial profile

Investors should take a closer look at Plug Power, a small cap that develops hydrogen fuel systems, but the risks are substantial, writes Motley Fool analyst Matt DiLallo. Data centers require enormous amounts of power to support AI development, and Plug Power sees an opening in that market. However, its weak financial position could prevent it from taking full advantage of the opportunity, he cautions.

Plug Power, which has a market capitalization of about $2.6 billion on the Nasdaq, may be a "hidden AI power play" amid the rapid adoption of AI, according to DiLallo. The analyst notes that data centers need vast amounts of electricity to support AI workloads, creating a potentially lucrative market for auxiliary and backup power providers.

Plug Power develops fuel cell systems that could be used in power and storage infrastructure for these facilities. In October, Plug Power said it had signed an agreement with an unnamed U.S. data center developer to explore using Plug’s power solutions in new projects. As part of this initiative, the company signed a nonbinding letter of intent to monetize its electricity rights in New York and another undisclosed location.

Plug Power believes its fuel cell systems are well suited to provide the reliable, low-emission power required by AI data centers. The company estimates these initiatives could generate $275 million in"liquidity improvement."

The main obstacle for Plug Power is its financial situation, DiLallo cautions. The company has been burning significant amounts of cash for years to finance operations and expansion. For the first nine months of 2025, Plug Power reported a net loss of $789 million on $485 million of revenue. According to its most recent financial statements, at its current rate of cash burn the company would have enough liquidity for less than two quarters, the article says.

After the quarter ended, Plug Power raised $370 million from existing investors through warrant exercises and completed a $375 million convertible notes offering to refinance higher-cost debt, improving near-term liquidity. However, the analyst notes that the company will still require additional capital to fund operations and expansion, which could limit its ability to fully capitalize on potential data center demand for fuel cells.

Plug Power shares have barely moved year to date. The most common rating on the stock is “hold,” assigned by 14 Wall Street analysts, MarketWatch data shows. Another six recommend “buy,” and five “sell.” The average target price of $2.70 per share implies 42% upside versus the last closing price.

The AI translation of this story was reviewed by a human editor.