Why Plug Power Stock Keeps Going Up

Plug Power (NASDAQ: PLUG) stock soared to close at $3.81 per share Friday, a 60% gain for the week. The hydrogen fuel stock actually only had one "down" day all week long, and its ascent looks set to continue today, with the stock up 4.5% through 10:35 a.m. ET.

The question is why.

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What H.C. Wainwright said about Plug stock

The most obvious answer is that last week, analysts at H.C. Wainwright more than doubled their price target on Plug stock, from $3 to $7 a share. With Plug shares costing less than $3 at the time, you can see why that might get investors excited.

It didn't hurt, either, that Wainwright posited the potential for Plug stock to create a short squeeze last week. In the age of meme stocks, that's catnip for momentum traders. It's more than enough to explain Plug's 60% rise last week.

Is Plug stock a buy?

And yet, as I pointed out last week, Wainwright's recommendation -- which was based on a broad theme of growing demand for electric power -- actually seemed to favor investments in nuclear power stocks over investments in Plug. That's reason No. 1 to wonder whether Plug's momentum can continue.

Reason No. 2 is Plug Power stock itself. Before you join the momentum crowd, make sure you know what you're investing in.

Plug Power stock has lost $2 billion over the last 12 months. It has never been profitable across its 28-year history. It may never become profitable, either. Analysts who follow the company do project profits in 2030, maybe, but they've made similar projections in the past, and Plug has always proved them wrong.

While this time could be different, I personally don't believe it will be. Plug stock remains a sell for me.

Rich Smith 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.