Nel ASA’s Strategic Gamble Amidst Share Price Weakness

A stark contrast defines Nel ASA's current position. As the Norwegian hydrogen technology pioneer commits to a major technological expansion, its shares trade near historic lows, around €0.19 in early 2026. This divergence highlights a market deeply skeptical of the company's new strategic direction, even as management bets its future on a novel platform. The critical question is whether this pivot can reverse the equity's fortunes.

Investor caution persists despite the forward-looking strategy, rooted firmly in recent financial performance. The third-quarter 2025 results presented a mixed picture. While stringent cost-cutting measures succeeded in significantly reducing operational losses (EBITDA), the foundation for future revenue appears unstable.

A particularly concerning figure was the 47% year-over-year collapse in the order backlog, which shrank to 984 million NOK. This sharp decline complicates revenue visibility for upcoming quarters and helps explain why the stock remains anchored at the lower end of its 52-week range of 1.95 to 3.61 NOK, despite announced technological progress.

The Herøya Expansion: A Bet on Cost Leadership

Against this challenging backdrop, Nel's board has approved a significant expansion at its Herøya, Norway facility, following a seven-year development program. The cornerstone of this project is a new "Pressurized Alkaline" technology, with company data indicating its prototypes have demonstrated leading efficiency.

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

The scale of the initiative underscores its importance:
* EU Support: Backing from the Innovation Fund of up to 135 million euros.
* Company Investment: An initial commitment of approximately 300 million NOK from Nel.
* Production Scale: Initial capacity of up to 1 GW, designed to be scalable to 4 GW of annual output.

CEO Håkon Volldal has stated the primary goal is achieving cost leadership. By utilizing a modular container design that eliminates the need for expensive building structures, the aim is to drive down the levelized cost of hydrogen (LCOH) sufficiently to make projects economically viable without heavy subsidies.

2026: A Pivotal Year for Execution

Signs of ongoing business activity offer some counterbalance. The partnership with Samsung Engineering and recent orders exceeding $50 million for PEM electrolyzers demonstrate continued demand for the company's existing technology.

However, the trajectory of the share price will likely be determined by execution in 2026. The commercial launch of the new Pressurized Alkaline platform is scheduled for the first half of the year. Should Nel ASA successfully meet this timeline and begin converting its technological pipeline into profitable revenue, the current valuation may later be viewed as a transitional phase. Any delay in this commercialization, conversely, is expected to intensify pressure on the stock.