This industry could reach $180 billion by 2040. Citigroup offers four stock choices to choose from. There are a few more options.
Investors are anticipating some volatility on Wall Street with oil prices dropping and growth worries rumbling around the world. That’s as the clock ticks down to CPI and the start of a earnings season later this week, and in the backdrop a war is intensifying in Europe.
Tough times don’t last, but tough investors do right? Maybe, hopefully. In any case, you might find some comfort in focusing on the distant past right now.
And that’s where we’re headed with our Call of the Day Citigroup strategists have stock options to play what they predict will be one of the fastest-growing markets in 2040.
They are talking about the global fuel cell industry, a direct play on the green energy debate, and “reaching the part that batteries cannot.”
“Fuel cells enable both de-carbonization and energy resilience, and we see them as crucial in harder-to-abate sectors like commercial vehicles and marine,” a Citi team led by research analyst Martin Wilkie told clients in a note on Tuesday.
Their base case shows this market reaching 50 gigawatts and $40 billion by 2030. This represents a compound average growth rate exceeding 35% in dollars, with further acceleration to 500GW/$180 Billion by 2040.
They admit they’re on the bullish side with these projections, and note fuel cell stocks are on average down around 70% since their January 2021 peaks .
“The fuel cell equity story has had false starts before, but we see the impetus from emissions policy as well as announced hydrogen plans as creating attractive opportunities,” said the Citi analysts, highlighting policies such as the U.S. Inflation Reduction Act, which aims at beefing up renewable energy and a recent EU move to offer more green-energy research and development subsidies.
While passenger cars were a big source of demand for the growing fuel cell market in 2021, they don’t think it can be a big competitor to battery electric. But, stationary power, such distributed and backup power generation, and heavy-duty transport are expected to be key fuel-cell markets.
Ceres Power is a U.K.-based company
UK:CWR,
Plug Power
PLUG,
Belgium’s Umicore
BE:UMI,
and Japan’s Toyota
JP:7203
TM
are Citi’s buy-rated stocks with high exposure to the fuel-cell theme.
Daimler Truck is another name they mention.
XE:DTG
Volvo
SE:VOLV
SE:VOLV,
which are working with Germany’s Traton
XE:8TRA
Cellcentric, a joint venture, aims to develop the technology for trucks and has a production goal for 2025. Others are outsourcing fuel-cell tech, such as Italy’s Iveco Group
IT:IVG,
which has teamed up with South Korea’s Hyundai
KR:005380,
Paccar, U.S.-based Paccar
PCAR
Toyota
TM.
The markets
Stocks in the United States
DJIA
SPX
COMP
Bond yields eased, but opened lower. They rose later in the morning.
BX:TMUBMUSD10Y
The dollar
DXY
slipped.
The buzz
Shares of the world’s biggest chip maker, TSMC
TW:2330,
fell 8% in Taiwan
TW:Y9999,
Stocks in China dropped more than 4 percent after new U.S. restrictions on exports to China of semiconductors and chip making equipment.
The Bank of England made the second move of the week to calmjittery markets by declaring Tuesday that it will increase its bond purchase to include an index-linked U.K bond. The program will end Friday, which is something that the pensions industry would like to see extended. Those yields
BX:TMBMKGB-10Y
BX:TMBMKGB-30Y,
In the meantime, things continue to climb higher.
The National Federation of Independent Business small businesses index showed confidence rising in September but inflation remains a problem. At noon Eastern we’ll hear from Cleveland Fed President Loretta Mester.
Flexjet, a subscription-based private aviation company, plans to go public via a merger with SPAC Horizon Acquisition
HZON
It was valued at $3.1 million.
The U.S.’s third-biggest railroad union will be back at the negotiating table with employers on Tuesday, after rejecting a deal and raising the possibility of crippling strikes.
The Kremlin’s war hawks were thrilled at the devastating strikes across Ukraine on Monday. They want more. G-7 leaders hold an emergency meeting to discuss ramping up the war.
Amazon’s
AMZN
Tuesday marks the start of the second Prime Day like event.
The best web
U.K. spy chief says Russians are starting to realize the cost of Putin’s war in Ukraine
India’s biodegradable bags are in demand, and reviving its industry
We are not at ease. The world must be ready for more sabotage
According to TIAA’s head, one of the largest transfers of intergenerational wealth will be happening.
The chart
This graphic by Visual Capitalist’s Truman Du, shows Disney’s
DIS
streaming empire — Disney+, Hulu, ESPN+ — is “giving Netflix
NFLX
a run for its money.”
Quarterly reports from Visual Capitalist, Disney and Netflix
The tickers
These were the most searched tickers on MarketWatch at 6 a.m. Eastern Time
| Ticker | Security name |
| TSLA | Tesla |
| GME | GameStop |
| AMC | AMC Entertainment Holdings |
| AAPL | Apple |
| NIO | NIO |
| BBBY | Bed Bath & Beyond |
| APE | AMC Entertainment Holdings preferred shares |
| NVDA | Nvidia |
| TWTR | |
| AMD | Advanced Micro Devices |
Random readings
This 2,560-pound pumpkin is the envy of all.
“Where’s Tony gone?” Supply-chain woes hit (shudder) Frosted Flakes.
Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will go out around 7:30 a.m. Eastern.
Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton.
