Ballard Power Systems (TSX: BLDP) is a stock trading under $5. Many know this stock as a company researching hydrogen fuel cell technology that can make trucks and buses run on water. Hydrogen vehicles are still a futuristic technology that needs funding support from the government as it is not yet economically feasible. Ballard Power System is getting financial support from the United States, Europe, and China through tax credits and government investments.
How Ballard Power Systems plans to make hydrogen fuel cell feasible
The biggest problem electric cars faced in the early 2010s was charging/re-fueling infrastructure; hydrogen fuel cell technology is facing a similar problem today. It is expensive to deploy hydrogen infrastructure across the nation. Hence, Ballard Power Systems focuses on commercial vehicles like buses, trucks, forklifts, and marines that assemble at the depot for regular maintenance and refuelling. The fuel cell technology is still at a nascent stage when it comes to commercial deployments, but acceptance has increased.
Ballard Power Systems started receiving orders a few years back. The timing of demand and deployment of fuel cell infrastructure is creating the need for higher working capital. The company is maintaining six quarters of operating cash usage in cash reserves to meet the working capital requirement.
The company has US$722.8 million in liquidity, which is more than enough for a quarterly operating cash use of US$40 million. It has sufficient cash to build fuel cell plants and invest in further research to reduce the cost of technology. These fundamentals show that Ballard Power Systems is a company that can sustain the test of time and benefit from the hydrogen fuel revolution in the future.
The future of hydrogen fuel cell stocks
Ballard Power Systems is looking to recreate the transportation industry and address the most pressing issue of carbon emission. The emergence of net zero will only grow, looking at the speed at which climate change is affecting the economy. About 10-15 years ago, graphic processing units (GPU) were used in gaming that needed higher computing. At the time, the computing power of central processing units (CPUs) was sufficient. Today, we are in the age of artificial intelligence (AI), and Nvidia’s GPU-led computing is efficiently handling AI workloads.
If you invested in Nvidia in the early 2010s, you would be a millionaire by now. GPU computing needed years of perfecting the technology and the need-based demand to reach its potential.
Ballard Power Systems has the potential to become the next Nvidia. The few traits Ballard Power shares with Nvidia is it is working on a future problem today. It is investing in perfecting the technology. It has a competitor, Plug Power. However, the hydrogen fuel cell market is large enough to accommodate two to three players.
Investing in stocks to be a millionaire
If you are investing to be a millionaire, you have to invest with a long-term horizon. When you buy a stock, ask yourself will this product be relevant 10-15 years from now? A decade is a long time. No one can predict the future. However, we can make an educated guess and invest in solutions for future needs.
In 2010, nobody knew Nvidia would overtake Apple in 2024. However, long-term investors took a chance and invested in futuristic technologies. You can invest $5,000 each in four to five futuristic stocks and diversify your portfolio. If even one of your investments succeeds, it could make you a millionaire.
You need not invest $5,000 in one go. Instead, you can invest $500 every quarter and hit the $5,000 mark. Along with Ballard Power Systems, you could also invest in Hive Digital Technologies when it trades below $4.
