Are AI and Data Centers Boosting Plug Power and Nel ASA? RE Royalties and Nordex Under the Microscope

RE Royalties: Moving Forward with Innovative Concepts

The financing chaos in Berlin exposes the weaknesses of European energy policy. After all, the energy transition requires not only new technologies but, above all, intelligent financing models. Permanent subsidies paid for by taxpayers cannot be the solution. It burdens the general public with the future of energy supply, while capital owners scramble for subsidies and artificially drive up electricity prices. With a completely new approach, RE Royalties has carved out a remarkable niche in recent years. The Canadian company does not operate wind or solar farms; instead, it provides growth capital to project developers. In return, it participates in their economic success through long-term revenue-based payments. This creates a business model that combines stable cash flows with the prospects of global expansion in renewable energy. The portfolio now comprises more than 120 investments in solar, wind, hydropower, battery storage, and energy efficiency, making it one of the most broadly diversified platforms in its segment. Since the company's founding, over CAD 80 million has been invested in numerous transactions, resulting in more than 130 individual projects.

As COO Peter Leighton made clear at the recent International Investment Forum, the company is now thinking several steps ahead and has initiated a strategic review. Various options are being examined, ranging from partnerships and new financing structures to potential corporate or investment transactions. Such processes often act as a catalyst for corporate valuation, especially when the existing business model has already proven its ability to generate sustainable returns. The engagement of a renowned financial advisor underscores the commitment to carefully explore all possibilities. This could get exciting!

Given the financing volume raised to date, the current valuation of just CAD 17.5 million appears very low, especially since the portfolio's average internal rate of return hovers around the high 19% mark. And the investment pipeline continues to grow steadily. Potential projects in the double-digit millions are already under discussion in the short term, while additional opportunities totalling around CAD 200 million are being evaluated. The US market, in particular, is emerging as a key growth driver. While many companies are still shouldering heavy investments in the energy transition and hoping for future profits, RE Royalties is already generating contractually secured revenue today. Very exciting and perhaps also a source of inspiration for the wild subsidy models coming out of Berlin!

COO Peter Leighton explains his strategy for the current year at the 19th International Investment Forum.

https://youtu.be/5dQvcZkFR7E

Nordex: Tailwind for the Next Growth Phase

Nordex remains one of the major beneficiaries of the European wind energy boom. Despite a consolidation of around 15% over the course of a few weeks, the long-term upward trend remains intact, as the stock has already more than doubled year-to-date. Fundamentally, there are hardly any signs of a slowdown so far. In Q1, revenue rose by 10.6% to EUR 1.59 billion, and earnings per share increased to EUR 0.23. For the full year, analysts continue to expect earnings of around EUR 1.88 per share. While many investors remain optimistic, others note that a 2026 P/E ratio of 27.4 is already a hefty sip from the valuation cup.

Management remains expansion-oriented and continues to focus on foreign investments, as the Hamburg site has been undergoing a downsizing process for years. A new rotor blade production facility has now been established in Menemen, Turkey, near Izmir. The plant has a capacity of up to 1,200 units per year, strengthening the company's cost position and supply to key markets in Eastern Europe and the Middle East. At the same time, Nordex is consolidating its strong position in Turkey, where the company ranks among the leading suppliers with a market share of around 34%. Operationally, the Hamburg-based company is currently benefiting from stable turbine prices, manageable supply chains, and higher production capacity utilization. Deutsche Bank also points to a market environment that remains favourable and confirms its "Buy" recommendation with a price target of EUR 59. The Q2 figures at the end of July will now be decisive, as they will indicate whether a margin improvement can still be priced in. If not, a long rally would end at a high of EUR 51.50—after all, the stock has increased fivefold since the beginning of 2024!

Plug Power and Nel ASA: Is the Hydrogen Era for Data Centers Finally Here?

Significant price swings have also recently been observed for the two hydrogen leaders, Plug Power and Nel ASA. Both companies have suffered over the past three years from declining order volumes, difficult refinancing conditions, and a resurgence of fossil fuels during the Trump era. Soaring oil prices of up to USD 120 in May offered a short-term upside scenario. Despite having doubled since January, Plug Power then posted a surprising 20% jump on the trading floor at the end of last week. The immediate trigger was quickly identified. The New York-based company received an order for the 30-MW Barrow Green Hydrogen project in the UK, under which it will supply electrolyzers for the annual delivery of approximately 100 GWh of green hydrogen to industrial giant Kimberly-Clark.

A massive order, yet the real driver behind the price surge is likely to be news from a competitor: US fuel cell manufacturer Bloom Energy has announced a major partnership to supply power to AI data centers, which has fueled market sentiment across the entire hydrogen and fuel cell sector. This has raised hopes that other industry players could also benefit from the explosive energy demand of AI infrastructure. Despite this positive momentum, the company remains in the red operationally through 2028.

Norwegian electrolysis pioneer Nel ASA also benefited from the overall electric atmosphere. A full 50% gain in just two weeks has now revived the technical chart, which clearly shows a long bottoming phase between EUR 0.175 and EUR 0.255. With the explosive breakout toward EUR 0.368 by the end of last week, volume and momentum indicators turned green. The two companies have now left the analyst community far behind. There are few "Buy" recommendations, and the 12-month consensus targets on the LSEG platform imply downside of around 15% to 40%. If that does not go 100% the other way! Wait for a consolidation phase before entering new positions; there is likely a bit too much AI euphoria at play right now.

Investors are not having an easy time of it right now! While chip stocks are soaring, many stocks have delivered weak long-term performance. For a long time, this included Plug Power and Nel ASA, though they have recently staged strong rallies in response to the Middle East crisis and renewed AI-driven enthusiasm. Nordex now appears to have passed its peak. In contrast, the innovative financing company RE Royalties is making noticeable progress. This portfolio composition illustrates that 100% gains are achievable—all selected stocks have reached that level in recent months!