The QuantumScape stock price has suffered a harsh reversal in the past few days as it plunged by ~40% from its highest point this year. It was trading at $11.20, down from the year-to-date high of $19.
Still, the QS stock is up by 115% this year, bringing its market capitalization to over $6.7 billion. So, is this a good stock to buy in 2026 as the short interest hits 10%?
Why QuantumScape stock price jumped
The QS stock price jumped this year after the company announced a new approach to manufacturing its solid-state batteries. Cobra, its new advanced ceramic separator, is a high-throughput, continuous-flow separator production technology.
Its hope is that the new approach will help it to manufacture batteries faster and at a lower cost. That’s because the traditional approach to making these batteries was slow and highly capital-intensive.
Most recently, the QS stock price jumped as the company announced a joint development agreement with another company, which it noted was a global top-ten company. It had previously signed another deal with a top manufacturer.
Additionally, the company conducted its demonstration with Volkswagen, by having its battery on Ducati V21L. It also announced a big deal with Corning.
The company is also moving forward with its commercialization efforts, with analysts predicting that it is nearing the end of its elevated cash burn.
The most recent results showed that the company’s loss from operations improved to $114.9 million in the third quarter from $130 million in the same period last year. The total net loss also improved from $119 million to $105 million as the company made $12 million in billings.
Is QS stock a good buy in 2026?
The coming year will be an important one for QuantumScape as the company makes progress towards commercialization. Analysts anticipate that the company will also continue to narrow its losses during the year.
The average estimate among analysts is that QuantumScape’s fourth-quarter earnings per share (EPS) will move from 22 cents in 2024 to 17 cents. This improvement will bring its annual loss per share to 72 cents from the previous 89 cents. It will then move downwards to 66 cents next year.
However, QuantumScape faces some major risks. First, there are signs that more people are shorting the company, with the short interest rising to 10%.
Second, there are concerns about the EV industry, with many automakers changing their tune. Volkswagen has taken more measures to pivot its business back to ICE vehicles in the past few months, a move that EU regulators have started to embrace.
QuantumScape has a large relationship with VW, its core client. Other automakers have also largely abandoned their flashy EV goals that they made a few years ago.
Finally, while the cash burn will drop, the company’s outstanding shares will likely continue. Its shares have jumped to 558 million today, up from 233 million in 2021.
QS stock price technical analysis
The daily chart shows that the QS stock price has dropped in the past few months. It has dropped from a high of $19 to the current $11.18, which is along the 50% Fibonacci Retracement level.
The stock has also moved below the 50-day and 100-day Exponential Moving Averages (EMA). The two averages are about to cross each other, which will be a bearish sign. It has also formsed a head-and-shoulders pattern.
Therefore, the stock will likely continue falling in the coming year, with the next key target being the 61.8% Fibonacci Retracement level at $9.40.
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