Plug Power, F3 Uranium, Super Micro Computer – The energy crisis intensifies

Plug Power – Sudden rise

In Europe, a discussion has arisen as to whether hydrogen produced from nuclear power can be labelled as "green hydrogen". Nuclear power reduces CO2 emissions to almost zero in energy production and, in contrast to wind and solar energy, is considered a stable energy source independent of the weather. According to the EU Commission, hydrogen produced using nuclear power can be marketed as "green". The prerequisite for this is an emission rate of less than 18 g CO2 per megajoule or that the area in which the hydrogen is produced obtains an average of 90% of its electricity from renewable energies. This topic is also of interest to Plug Power, which has expanded its presence in Europe in recent years.

Plug Power had a very good start to the year. New tax incentives for the production of green hydrogen have been introduced in the US that have the potential to revive the hydrogen industry. The US Department of the Treasury has created favourable conditions for hydrogen companies to invest in green hydrogen infrastructure with flexible regulations under the Inflation Reduction Act. As Plug Power already has the necessary production capacities, the new conditions should strengthen its competitiveness.

Despite the positive start to the year, several challenges remain for Plug Power. Revenues have recently declined, and gross margins have been negative, although losses per share have narrowed. The Company is pursuing projects in North America and Europe to expand its production capacities. It is currently awaiting a loan of around USD 1.7 billion from the US Department of Energy, which would enable it to implement several projects. However, it remains uncertain what will happen after the change of government in the US. Analysts expect the Company's key figures to improve in the second half of the year. After recently gaining over 50%, the stock price fell back and is currently trading at USD 2.87.

F3 Uranium – Well positioned for the future

After the US decided last year to ban imports of Russian uranium unless its own supply is threatened, it is now looking for alternatives in North America. The future president, Donald Trump, recently suggested that Canada should become the 51st federal state. Canada is rich in raw materials, and F3 Uranium has secured properties in the Athabasca Basin, which has the highest uranium content in the world. The so-called PLN project area, which covers approximately 525 km2, is the Company's flagship and comprises nine sub-projects. The Key Lake Road, Beaverlodge Area and NE Athabasca Basin projects are also located within this prolific basin.

Within the PLN property, the focus is on the JR zone, which has been expanded by extensive drilling over the past two years. High-grade uranium intersections were found. In early December, the results of drill hole PLN24-176 were published, which returned a remarkable 7.5 m of 30.9% uranium oxide (U3O8), including an ultra-high-grade core of 4.5 m of 50.1% U3O8. This makes it the best drill hole in the JR zone. The assay results also show that the deposit is close to world-class uranium deposits, such as Fission Uranium's Triple R, and has potential for uranium production.

For Sam Hartmann, Vice President Exploration, the next drill targets around this discovery have been identified. The hope is to develop additional target areas for high-grade mineralization. The Company is thus excellently positioned in the strengthening uranium market environment. Experts expect a 200% increase in uranium demand by 2040. Demand is being driven by the small modular reactors that are of particular interest to the big tech giants. It also supports decarbonization. Despite the rise in the price of uranium, F3 Uranium's stock was under pressure last year but appears to have found a floor at CAD 0.21 and is currently trading at CAD 0.255.

Super Micro Computer – Well positioned

The new data centres for artificial intelligence (AI) and crypto mining have a huge demand for computing power and, consequently, a high demand for electricity. Revenues from data centre equipment are expected to reach around USD 282 billion in 2024, according to estimates. By 2030, they are expected to triple. Analysts predict an expansion of data centres by the end of the decade. The growing demand for powerful processors is leading to enormous energy consumption, which means that the efficiency of the systems is becoming increasingly important. This is where Super Micro Computer can score with its water-cooling technology.

On January 9, the Company announced that it had started serial delivery of its Max Performance servers, which are characterized by their high performance in the field of AI and high-performance computing. To meet the demands of data centres with increasing power density, the Company is relying on innovative liquid cooling technologies. These include cooling solutions for processors, graphics processors and storage, as well as other components that can efficiently cool racks with a power output of more than 100 kW. This not only reduces operating costs but also eliminates the problems of traditional air cooling.

However, the opportunities arising from the growth in the market are accompanied by challenges. First and foremost is the delay in submitting financial reports. After the previous auditor unexpectedly resigned, a new one had to first be found. This has now been secured with BDO USA. If BDO can present the financial statements quickly, the greatest uncertainty would be removed from the market. However, the outlook for margins in the coming year remains uncertain. Critics warn of potential margin pressure. The stock has been moving sideways since mid-December and is currently trading at USD 32.60.

In many parts of the world, the energy crisis is not as dramatic as in Germany, but plans are already being made to use modular reactors to prevent electricity shortages. Plug Power's prospects are brightening thanks to the new favourable tax environment. Nevertheless, revenues and margins need to improve significantly. F3 Uranium is well positioned to benefit from the increasing demand for uranium with its high-grade uranium discoveries. Super Micro Computer is trying to reduce energy consumption in data centres with its liquid cooling solutions. The publication of the financial reports would remove the greatest uncertainty.