We recently compiled a list of the 12 Best Hydrogen and Fuel Cell Stocks to Buy for 2025. In this article, we are going to take a look at where Shell plc (NYSE:SHEL) stands against the other hydrogen and fuel cell stocks.
Hydrogen produced from renewable electricity could transform heavy industry and transportation, offering a clean, sustainable alternative to fossil fuels. Seen as a key to decarbonizing heavy industry, hydrogen provides a greener way to generate heat and power vehicles. While global investments in renewable energy have surged, electricity alone can’t meet the fuel needs of many industrial operations. Hydrogen steps in as a versatile option, functioning much like traditional oil and gas, allowing vehicles to run on clean fuel instead of petrol or diesel. The global hydrogen market, worth $148 billion in 2023, is expected to grow to $259 billion by 2033 at a steady CAGR of 5.75%. Moreover, BloombergNEF predicts hydrogen supply will expand thirtyfold, reaching 16.4 million metric tons annually by 2030.
U.S. regulations
Hydrogen holds immense potential, but its adoption still faces significant challenges. A 2024 report by IDTechEx estimated that only 4% of zero-emission vehicles (ZEVs) will run on hydrogen in the next two decades. However, it projected that around 20% of ZEV trucks could be hydrogen-powered by 2044. The report emphasized that expanding blue, gray, and green hydrogen markets—combined with supportive government policies—could accelerate innovation in fuel cell electric vehicles (FCEVs).
In the global hydrogen race, the United States is positioned to be a leading player, thanks to its mature projects and favorable tax policies that incentivize hydrogen development. However, the sector’s future faces uncertainty with the incoming administration of President-elect Donald Trump. Reduced federal support for green hydrogen initiatives could make it difficult for the industry to compete with cheaper fossil-fuel alternatives like natural gas, putting billions of dollars in planned projects at risk. “Lots of people in industry continue to see the long-term value of producing hydrogen to the U.S. economy and for export around the world,” said Frank Wolak, president and CEO of the Fuel Cell and Hydrogen Energy Association. “But there’s definitely a trepidation about what this industry looks like going into 2025.”
Overall, hydrogen remains in its early stages. The International Energy Agency’s (IEA) Global Hydrogen Review 2024 highlighted sluggish policy implementation in critical sectors like heavy industry, refineries, and long-haul transport. In 2023, global hydrogen demand reached just over 97 million tons, with a modest rise to 100 million tons expected in 2024—largely driven by economic trends rather than effective policy measures. As the IEA stated, “Hydrogen demand remains concentrated in refining and industrial applications, where it has been used for decades. Its adoption in new applications crucial for the clean energy transition—such as heavy industry, long-distance transport, and energy storage—accounts for less than 1% of global demand, despite a 40% growth compared to 2022.”
China leading the pack
China dominated nearly 60% of the global 25-gigawatt electrolyzer manufacturing capacity in 2023, according to a report from the IEA. The Paris-based organization projects that China will remain a leader, producing over half of the world’s electrolyzers by 2035. By 2050, the IEA estimates global installed electrolyzer capacity could reach 320 GW, assuming countries meet their Paris Agreement commitments. The report highlights that EU initiatives promoting low-carbon aviation fuel are a key driver of electrolyzer demand. It predicts that transportation will account for two-thirds of global demand by 2050, with the remainder distributed across industrial, refining, and power sectors. By midcentury, China is expected to utilize 25% of installed electrolyzers, followed by the U.S. at 14%.
Our Methodology
To compile our list of the Best Hydrogen and Fuel Cell Stocks to Buy, we started with companies that have a significant presence in the hydrogen and fuel cell industry. We sifted through ETFs and lists on the internet. We then refined the selection by focusing on the number of hedge fund holders as of Q3 2024, based on data from Insider Monkey’s database, which tracks the activity of 900 hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A gas refinery lit up against the night sky, showing the scale of the company’s petrochemical operations.
Shell plc (NYSE:SHEL)
Number of Hedge Fund Holders: 48
Shell plc (NYSE:SHEL) is a global energy and petrochemical company engaged in the exploration, production, and sale of crude oil, natural gas, natural gas liquids, low-carbon fuels, lubricants, bitumen, and petrochemicals. The company also invests in renewable electricity generation, hydrogen sales, and electric vehicle charging infrastructure.
The company recently announced a final investment decision for Bonga North, a $5 billion deep-water project off the coast of Nigeria. This development underscores Shell’s continued investment in traditional hydrocarbons while contributing to the growth of Nigeria’s oil and gas industry. Production from the project is expected by the end of the decade.
In Q3 2024, Shell plc (NYSE:SHEL) reported adjusted earnings of $6 billion, exceeding analyst expectations by 13.2%. Free cash flow rose significantly to $10.83 billion, up from $7.5 billion in the same period the previous year. The company also announced plans to repurchase $3.5 billion in shares by year-end while maintaining its dividend at $0.34 per share.
In October, Piper Sandler reaffirmed an Overweight rating on Shell plc (NYSE:SHEL), raising its price target to $82. The firm praised Shell’s strong operational performance, highlighting LNG liquefaction volumes of 7.5 million tonnes (MT), which surpassed the 7.1 MT estimate, and steady exploration and production output despite expectations of a decline.
According to Insider Monkey’s data, 48 hedge funds held long positions in Shell plc (NYSE:SHEL), slightly down from 49 in the prior quarter.
Overall SHEL ranks 4th on our list of the best hydrogen and fuel cell stocks to buy for 2025. While we acknowledge the potential of SHEL as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SHEL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
