Why Plug Power Stock Skyrocketed 28.5% Today

Shares of Plug Power (NASDAQ: PLUG) jumped on Monday, finishing the day up 28.5%. The spike comes as the S&P 500 (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC) were both up modestly.

Plug Power, which is developing hydrogen-based clean energy technology, received a boost from the Senate's latest version of the "Big, Beautiful Bill."

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The Senate changes a key tax incentive

President Trump's "Big, Beautiful Bill" is currently working its way through Congress. The Senate's latest version includes a provision extending hydrogen industry tax credits through Jan. 1, 2028, two years longer than the previous version. This significant change sent hydrogen stocks across the board higher.

The extension has apparently gained support even from oil companies like ExxonMobil. The companies view hydrogen as a potential clean energy revenue stream, as most hydrogen today is made using natural gas. Plug Power has committed to moving toward 100% clean methods that do not use natural gas, but for now relies in part on fossil fuels.

Image source: Getty Images.

Plug is a risky bet

Investors interested in the company should know that Plug is struggling. The company's sales have stagnated and declined for some time, with the notable exception of last quarter. It is operating at a loss and burning cash.

For investors with a high risk tolerance, Plug could be a speculative turnaround play, but I would caution most investors to stay away. The extension of the tax credit would be a lifeline, but even if it does go through, there is a chance Plug faces bankruptcy in the not-so-distant future.

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Johnny Rice 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.