Why Nikola Stock Jumped, Then Dropped Today

The label of momentum in the hydrogen fuel technology sector perks the ears of Nikola traders.

Howard Smith

What took discipline

Shares of Nikola (NASDAQ:NKLA) were up bigger than 5% Tuesday morning earlier than giving up some of these beneficial properties. As of 2: 15 p.m. EST, the stock had obtained about 2.5%. 

The early leap wasn’t correct from standard volatility in the controversial title, despite the undeniable truth that. 

So what

Though Nikola’s first manufacturing vehicle is slated to be the battery-electrical Tre semi truck, the long-timeframe investing thesis for Nikola would require success with its hydrogen fuel cell-powered Two mannequin as neatly. Last Friday, the U.S. Division of Energy (DOE) supplied plans of federal funding for hydrogen fuel technology pattern. 

Nikola truck at hydrogen fueling station

Nikola truck at hydrogen fueling discipline. Image supply: Nikola.

Now what

Among the most hope, and early hype, for Nikola became as soon as in accordance with creating hydrogen fueling technology and infrastructure. Last week, the DOE supplied $160 million in funding “to assemble applied sciences for the manufacturing, transport, storage, and utilization of fossil-basically based entirely hydrogen, with progress towards gain-zero carbon emissions.”

Specific targets embody creating unique, or modified, solid oxide electrolysis cell technology; bettering pure fuel-basically based entirely hydrogen manufacturing; and making hydrogen pipeline and storage infrastructure more efficient in mark and efficiency. 

Nikola has touted its plans for both battery-electrical and hydrogen fuel-powered autos. Build-effective hydrogen fueling technology is an discipline that traders contain persisted to question. But a most modern agreement with a utility for hydrogen manufacturing and more federal enhance for the technology contain shares bouncing off lows from dreary closing twelve months. Investors that aid the stock know that it’s a ways mute a hypothesis, nonetheless every push towards more utilize of hydrogen fueling technology is a potentially distinct long-timeframe pattern. 

Howard Smith owns shares of Nikola. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”>

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