Key Points
Plug Power's sales were strong in the first quarter, eclipsing analyst expectations.
The stock had already been rallying for multiple months heading into the earnings report.
The recent rally is impressive, but Plug Power's stock is still down big over the past five years.
- 10 stocks we like better than Plug Power ›
A short squeeze can instantly send a stock rallying. It can happen when a risky stock that short sellers have been betting against generates promising results, leading to a rally. Then, short sellers may panic to cover their short positions, which could fuel the rally even further. That kind of momentum can quickly make a stock take off.
Plug Power (NASDAQ: PLUG) has been a heavily shorted stock, and it recently posted better-than-expected earnings. Could this inevitably lead to a short squeeze, and is now an opportune time to buy this struggling hydrogen stock?
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
Plug Power shrinks losses and beats revenue expectations in Q1
Last week, Plug Power posted some encouraging quarterly numbers, with its sales for the first three months of the year rising by 22%. At $163.5 million, the top line came in well above the $140 million analysts were expecting. And on the bottom line, its operating loss of $109 million was also a shade better than Wall Street's estimate of $110 million. It was a big improvement from its $178 million operating loss in the same period last year.
Its electrolyzer business has been doing well, but despite the promising growth, Plug Power still burns a considerable amount of cash. During the quarter, it used up more than $150 million just to fund its day-to-day operating activities. The danger for investors is that with a rapid pace of cash burn, the risk for frequent stock offerings and dilution remains high.
The stock has been surging in recent months
In just three months, shares of Plug Power have risen around 90%. However, there hasn't been a sudden surge of bullishness following its latest results, suggesting that the recent earnings numbers, while promising, may not be enough of a reason to send a panic through short sellers. This is, after all, a stock that is still down a whopping 86% in five years. The recent rally in the share price may have put a dent in short sellers' profits, but people betting against the stock may still be sitting on some large gains.
Plug Power's stock may not be heading for a short squeeze. The reality is that there are still huge question marks around the business and its long-term future, which is why short interest remains high. Until the company puts to rest concerns around its high rate of cash burn, this is going to be a highly risky and potentially volatile stock to own. The safest option for investors is to take a wait-and-see approach with Plug Power stock.
Should you buy stock in Plug Power right now?
Before you buy stock in Plug Power, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Plug Power wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $483,476!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,362,941!*
Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 207% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of May 19, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
