Shares of Plug Power (NASDAQ: PLUG) witnessed a surge in May following the announcement of a conditional commitment for a $1.66 billion loan from the U.S. Department of Energy (DOE). However, concerns are growing as the stock remains below its pre-announcement levels and the loan faces scrutiny from a U.S. senator.

Plug Power has been grappling with a flawed business model, which it is determined to rectify. The company initially found success by selling fuel cells for forklifts and other material-handling equipment to companies like Amazon and Walmart. However, it struggled to make profits due to selling the hydrogen fuel needed to power its fuel cells at a loss. Negative gross margins resulted in a significant gross loss of $159 million in the company's most recent financial report.

To address these challenges, Plug Power has been working towards building its own hydrogen plants to produce fuel at a profit. The conditional commitment for the DOE loan in May provided an opportunity for the company to secure funding for up to six green hydrogen production facilities. At present, Plug Power already has two plants in operation, with another expected to be completed by year end.

Amid the optimism surrounding the DOE loan, concerns were raised in June by Senator John Barrasso, a Republican from Wyoming and the ranking member of the Senate Committee on Energy and Natural Resources. He called for an investigation into the potential conflicts of interest associated with the loan program's director, Jigar Shah, as well as questioning Plug Power's viability given its $1.4 billion losses in the previous year.

While Plug Power could seek alternative financing options if the loan falls through, the terms and interest rates may not be as favorable. Moreover, the company's financial position and negative operating cash flow raise uncertainties about its ability to secure funding from other institutions.

As the stock continues to decline, some investors may see this as a buying opportunity. However, analysts suggest caution due to the uncertainties surrounding the loan approval and Plug Power's profitability. The company aims to achieve gross margin breakeven in its fuel business by the fourth quarter, but this alone would not guarantee profitability or positive cash flow.

The future of Plug Power hinges on multiple factors, including the approval of the DOE loan, successful expansion of its plant network, and improvement in gross margin and cash flow. If these milestones are achieved, the stock could see significant upside. However, there is also the inherent risk that the company's efforts may not lead to desired results.

Investors considering Plug Power should take note that The Motley Fool Stock Advisor analyst team did not include the company in their list of recommended stocks. They identified 10 stocks that they believe have the potential to deliver substantial returns in the coming years. It is important to research and evaluate all available options before making any investment decisions.

Disclaimer: The information in this article is based solely on the provided context and does not constitute financial advice. Investors should conduct their own research and seek professional guidance before making any investment decisions.