A couple of years ago, things looked dire for Plug Power (PLUG 3.42%) stock. It was plunging in value and it even issued a going concern warning, which means that the business was concerned about its finances and that there were significant doubts about its ability to continue operating.

The company says that risk no longer exists. And not only are its financials stronger, but the energy stock has also been red hot of late. This year, share prices of the hydrogen company are up an incredible 95%. In just the past six months, its stock price has more than tripled in value.

Has this once-risky stock become a good, safe option for investors?

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Why is there so much hype around Plug Power?

Energy has been a big investing theme this year, largely due to artificial intelligence (AI) and the need to power up large data centers. Plug Power has positioned itself as one of the leading companies in offering clean energy solutions with hydrogen fuel cells. Many investors likely see the zero-emission energy options that Plug Power offers as one of several potential solutions to rising energy needs in AI.

The more that tech companies invest in AI data centers, the greater the need may be for energy in the future. And it’s that potential growth that has many investors willing to look past Plug Power’s lack of profitability and shortcomings today — but doing so could be a perilous mistake.

Plug Power’s financials remain problematic

Plug Power may have removed the near-term going concern warning last year, but I have doubts about the company’s ability to survive in the long run. This is, after all, still a massive, cash-burning business. In the past six months, it has incurred net losses totaling $425.6 million, which was more than the revenue it generated over that time frame ($307.6 million). The business’s cost of sales was even higher at $435 million, resulting in negative margins and a loss before even factoring in overhead and other operating expenses.

It also burned through $297 million in cash over the course of its day-to-day operating activities during the past two quarters. Without a path to profitability or positive cash flow in the foreseeable future, there is plenty of risk for dilution and frequent share offerings in the stock’s future.

I’d stay away from Plug Power stock

Investing in hydrogen energy is a long-term play, and it’s one that’s full of risks. While hydrogen can play an important role in addressing the world’s global energy needs, not everyone is convinced that it will be the case. Some critics point to the inefficiency and high costs that come with hydrogen energy production. And there are alternative energy sources that may be cleaner and better options in the long run.

It’s easy to get swept up in the AI-driver energy hype, and that’s what may be happening with Plug Power. But that doesn’t mean this is a safe stock to invest in. For a while, this stock was going nowhere but down; it declined by more than 50% in each of the past three years. Then, the energy stock craze took off, and so did Plug Power’s valuation.

While it may look like a cheap stock to own given its massive decline in recent years and the fact that it’s trading at just 4 times its trailing revenue, this is still a highly risky investment to hold in your portfolio. Until and unless its fundamentals drastically improve, you’re likely better off avoiding Plug Power as this is a speculative stock to own, with plenty of downside risk.