Hydrogen-Based Renewables: Buying the Dip in a Bull Trend

The AI-driven data center (AI-DC) build-out has created an immediate, critical power-demand crisis. The market's initial "solution"—Small Modular Reactors (SMRs)—needs a reality check on at least one aspect  : time to power. SMRs are a decade-long solution. AI demand is a today problem. I produced an infogrpahic summarising this theme back in JUly based on some in-depth work - see the Article Here  AI Power Dilemma Infographic One Pager

This is the "reality check" that is driving the re-rating of many of the modular renewables . The market is realizing that modular, quick-to-deploy hydrogen fuel cells are an immediate  viable off-grid solution that can be scaled in months, not decades.

This new, credible business case is the catalyst. The stocks aren't just rallying; they are being re-positioned as the critical bridge technology for the AI revolution.

On a purely technical basis, the renewables sector is currently one of the most bullish in the UK - that's just an objective observable based on price relative to 50 and 200MAs - see plot .That said it has suffered a catastrophic drop from  its darling days back in 2020 to 2021 that saw Ceres with highs north of 1600p ( though an all time high of 3900p in 2008:)  it's currently down 90% from highs. ITM is similarly down 88% from its ATH of 717p in 2021 , AFC down 89% ... you get the picture

That reinvention of this sector reflects the AI-DC narrative and the shift in sentiment form one of the most hated sectors to now one of the most promising.

The pivot is a much in the application as it is in the underlying origin story . The Trumpian vilification of anything green  had all but left this sector for dead as an univestable  ESG aberration. Now it has been reinvented as the go-to solution for the AI power dilemma: Forget ESG, Renewables are being rebranded and repositioned as a key AI enabler

Looking to the US: SOFC in BLOOM

Here's a chart of the US SOFC name Bloom. Energy : IN october 2024 it has a stock price of about $9 now it is north of $142 that's almost 1500%  increase in price . If CWR were to pull a  similar manoeuvre from its lows around 50p in April that's a 750p target - still less than 50% of its 2020 highs above 1580

CWR the long road back

Renewables in the Top 3 Most Bullish Sectors in the UK

(this excludes microcaps <£30m which skew disproportionately).

Leading the RIP ITM

Phase 1: The Internal Turnaround (The 1-Year View) Leader: ITM Power (+122% 1-Year)

Driver: This was the "viability" trade. The market saw ITM fix its core manufacturing (the 98% FAT pass rate) and re-rated it from "going-to-zero" to "a viable business." This was a pre-requisite for what came next.

ITM

Phase 2: The AI-Power Catalyst 

• Leader: Ceres Power (+165% 3-Month +530% in 6 months)
• Driver: This is the thematic trade. The AI-DC narrative hit the market, and capital immediately rotated into the stock with the most direct, de-risked link to the solution.
• CWR's Catalysts:

1. Partnership Proof: Doosan began mass production of CWR-licensed SOFCs (the "engines") specifically for the data center market (July 2025).
2. Market Validation: Delta Electronics is actively developing MW-scale systems for the same purpose
3. Power Partnerships :  Nov 25 Weichai signs a manufacturing licence agreement for the production of Ceres' proprietary solid oxide fuel cell - further proof of the IP model and clear line-of-sight to revenues at scale 

Analyst Capitulation: The massive, chasing upgrades from Goldman Sachs (to 480p) and UBS (to 350p) act as a lagging indicator, confirming the new thesis is now consensus.

Defining the Dip

On a tactical trading level ,we can drill in closer in timescales we find Renewables deep in the lower left quad of our sector momentum plots - but in pullback mode . This is normally a good place for dip buying - buying pullbacks in uptrends as opposed to adding to losses in downtrends.

Looking at relative momentum within the sector:

Ceres is way out in front  on a 3M and 1 M basis-  BUT it is actually in catch-up mode relative to ITM on a 1 year basis

Is ITM Ready to take back the Baton or Does FTSE 250 CWR Prove to be the Winner?

zooming out to 1 year / 3 months ITM is  ahead of CWR prior to today on a 1 year basis - CWR is playing catch-up BUT , I expect ITM to reload and  breakout above its 100p July high

I'm in both with reasonable positions although I have taken profits along the way and added back on retraces.  This sector and these names especially tick so many boxes in terms of transformational opportunities. I have written a few pieces to date but will write a more in-depth analysis on why i believe these are critical to the success of  the AI-DC build out and why we may be on the  verge of a huge mega trend in the commercialisation at scale of novel power solutions that have been a solution looking for a problem for decades