ITM Power: Inside the 113% Volatility Stock That Just Attracted a Government Stake and a Rheinmetall Pact

Investors in ITM Power have been strapped into one of the clean energy sector’s wildest rides. The British electrolyser maker ended last week at €1.48, good for a 14% weekly gain — but that surge came on the heels of a 27% monthly plunge the period before. With annualised 30-day volatility clocking in at 113.55%, the stock trades less like an industrial play and more like a binary option on hydrogen’s future.

The latest leg higher was fuelled by three catalysts arriving in quick succession. Berenberg more than doubled its price target to 200 pence from 110 pence, citing growing confidence in the company’s strategic overhaul. A director — Warren East, a board member — purchased 172,000 ordinary shares, a move retail traders read as a strong internal vote of confidence. And perhaps most significantly, ITM Power signed a cooperation agreement with German defence giant Rheinmetall, committing up to 50 megawatts of electrolyser capacity for the Giga-PtX programme aimed at producing synthetic fuels to NATO standards.

Yet for every bullish signal, there is a sceptical counterweight. While Berenberg sees the stock worth 200 pence, Goldman Sachs maintains a sell recommendation. The analyst consensus, including all houses, points to an average fair value of just 131 pence — a stark reminder of the deep divide on the Street. Simply Wall St recently raised its own fair-value estimate to £1.31 from £1.19, but that still implies 11% downside from the current pound-denominated price.

The optimists point to a powerful new backer: the British state. Great British Energy acquired a stake of just over 10% in the second quarter of 2026, injecting £40 million in equity. A further potential government grant of around £46 million could follow. That capital is earmarked for building automated mass-manufacturing lines for the next-generation “Chronos” electrolyser, which promises higher energy efficiency and lower production costs. Meanwhile, management has already lifted revenue guidance for the full year 2026 to a corridor of £40 million to £43 million.

Should investors sell immediately? Or is it worth buying ITM Power?

On the operational front, ITM Power is pushing a standardisation strategy centred on its ALPHA 50 unit — a 50-megawatt electrolyser designed to accelerate large-scale hydrogen projects. A key test will come from a new design study with DB Systemtechnik, the engineering arm of Deutsche Bahn, set to kick off shortly. Success there could open the door to European rail infrastructure contracts. The company’s existing partnership with Rheinmetall also includes plans for decentralised synthetic fuel plants, broadening the addressable market.

Technically, the stock is in an odd position. It sits 42.55% below its 2026 high of €2.58 reached on 29 May, and still trails its 50-day moving average of €1.75 by 15.36%. But from its February low of €0.65, the share price has more than doubled — a 128.55% recovery. The 200-day moving average of €1.06 sits nearly 40% below the current level, and the relative strength index of 46.7 remains neutral, leaving room for further moves without signalling exhaustion.

The next decisive moment looms in December 2026, when the final investment decision on the Cromarty green hydrogen project in Scotland is due. Partner Protium Green Solutions handles power supply, permitting and distribution infrastructure. A positive outcome, combined with smooth execution of the Rheinmetall programme, could give the bulls the ammunition they need to close the gap to analyst targets on the high side. Without it, this latest rally may prove just another sharp spike in a stock defined as much by promise as by profitability.