QuantumScape stock has dropped much more than average today compared to other technology companies. At 2:45 p.m. ET on May 21, QuantumScape stock was down by 6%, lagging behind the tech-heavy Nasdaq Composite index by a wider margin (-1.3%).
What’s the Reason?
Investors aren’t fleeing the quantumscape stock because of anything happening at the company. In contrast, QuantumScape stock does not require a macro view at the present time. The business has been working on a potentially revolutionary battery for the EV market for years. Once solid-state battery technology is fully developed and marketed, charging periods should be reduced during battery efficiency and safety increase. Furthermore, it has the potential to outperform and outlive conventional lithium-ion batteries while extending the driving range of vehicles.
However, commercialization is still a few years away, and in the current economic scenario, investors are shying away from firms like QuantumScape (NYSE:QS) that are valued only on hope and potential rather than revenue.
Future profit expectations for technology businesses like QuantumScape (NYSE:QS) are discounted because the Federal Reserve will issue another substantial interest rate increase tomorrow. The company has made and is making technological advancements, but it is unlikely to see significant revenue until at least 2025.
QuantumScape (NYSE:QS) announced the signing of customer sampling agreements with six vehicle manufacturers in its most recent quarterly report. Several of the world’s top 10 automakers by revenue are included here, along with other high-end manufacturers of high-performance and luxury vehicles.
Still, it’s essential to build a pre-production pilot line and conduct testing and validation as part of the process. QuantumScape (NYSE:QS) has enormous potential if it is successful, but investors are reluctant to invest money since they expect the economy to remain weak for the foreseeable future. How the Federal Reserve ultimately takes the economy may affect this stock’s near-term trajectory.
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