Investor Confidence in Nel ASA Remains Elusive Despite Contract Wins

The Norwegian hydrogen technology firm Nel ASA finds itself in a perplexing situation. Despite announcing several significant contracts in recent weeks, its share price continues to struggle, highlighting a growing disconnect between operational milestones and market valuation. Investors are maintaining a skeptical stance, responding to a mixed financial picture and a complex market environment with further selling pressure.

This skepticism was on full display during Thursday's trading session. In a move counter to the broader market trend, Nel's shares declined by approximately 3% to 2.32 NOK, positioning the stock as one of the day's notable underperformers. This drop occurred even as Oslo's benchmark OBX Index advanced by 0.69%, reaching a new monthly high.

The year-to-date performance further underscores this divergence. Nel's equity has shed over 14% of its value since the start of the year, decoupling sharply from the positive momentum seen in the overall market, where gaining issues have recently far outnumbered decliners.

A Robust Pipeline of New Business

The persistent share price weakness is not due to a lack of positive operational news. The company has, in fact, secured a series of substantial orders that would typically be expected to provide a lift to investor sentiment:

Should investors sell immediately? Or is it worth buying Nel ASA?

• A Major 50 Million USD Project: An agreement to supply PEM electrolyser equipment for HyFuel and Kaupanes, scheduled for November 2025, stands as the second-largest contract in Nel's history.
• Additional Green Hydrogen Projects: New orders for GreenH projects located in Kristiansund and Slagentangen.
• Repeat Business: A third order from H2 Energy in October for container-based hydrogen solutions.

The HyFuel and Kaupanes deal, in particular, represents a milestone. It constitutes the largest single purchase order for PEM equipment received by the company to date, with each project involving a 20-megawatt capacity.

Underlying Financial Headwinds Persist

So why has the market reaction been tepid? The answer lies in the company's most recent quarterly report (Q3 2025). While Nel maintains a solid cash position of about 1.76 billion NOK and has shown improved EBITDA figures, other metrics paint a more challenging picture.

New order intake plummeted by 64% year-over-year, causing the total order backlog to contract by nearly half. Revenue also declined by 17%, casting a shadow over the quarterly results. Furthermore, a net loss of 85 million NOK demonstrates that the path to sustained profitability remains arduous.

For a lasting reversal in market sentiment to take hold, Nel must demonstrate that its recent 50-million-dollar contract is not an isolated event. Investors will be looking for consistent evidence that such deals can permanently offset the severe contraction witnessed in the company's order backlog. Until then, skepticism is likely to prevail.