No Need to Wait for Earnings to Buy QuantumScape Stock
InvestorPlace - Stock Market News, Stock Advice & Trading TipsA collaborative foray into stationary energy storage, combined with QuantumScape's eye-opening fast-charge data, make the case for QS stock.The...
Headquartered in California, solid-state electric-vehicle (EV) battery maker QuantumScape (NYSE:QS) stock is part of the electrification revolution of the 2020s. To take part in this exciting movement, all you have to do is pick up a few shares of QS stock.
Don't get me wrong — an investment in QuantumScape isn't for everyone. Volatility is the norm in the EV battery sector, so only risk-tolerant traders should hold shares of QuantumScape.
Granted, there's plenty of good news to report about this company. For example, QuantumScape swung from a net earnings loss in 2020's third quarter, to a net earnings profit ($15,351,000, to be exact) in the third quarter of 2021.
The company is gearing up for a fresh earnings release on Feb. 16. Should prospective investors wait that long to take a position, though? Really, it's not necessary as QuantumScape is forging ahead, regardless of the fiscal data, with some of the best EV battery tech in the world.
A Closer Look at QS Stock
I won't mince words here. It's probably best just to buy QS stock, close your eyes, and don't look again for a long time.
Again, volatility will be a normal state of affairs here. If you stare at the charts too much, you'll be tempted to sell whenever the share price doubles or gets cut in half, which happens more often than you might think it would.
For instance, there was that time in late 2021 when QS stock jumped from $22 to $40 and change in just a few weeks. Soon afterwards, however, the shareholders coughed up all of those gains and then some.
Fast-forward to early February 2022, and QuantumScape shares were trading at $17 and change. The stock hasn't been that cheap since 2020, so there could be a prime bargain here that's ready for the taking.
Contributing To a Lower-Carbon Future
Even if QuantumScape is spearheading the EV battery-tech revolution, the company can't disrupt an entire industry by itself.
Thus, QuantumScape has decided to enter into a multi-year agreement with Fluence Energy (NASDAQ:FLNC). Together, the companies will introduce solid-state lithium-metal battery technology to stationary energy storage applications.
To put it simply, QuantumScape will incorporate its battery technology into Fluence's stationary energy storage products.
This could turn out to be quite lucrative for both companies. According to QuantumScape, from 2020 to 2030, stationary energy storage installations are expected to grow by more than 2,000%. With that, this niche market should represent a $385 billion global market opportunity.
QuantumScape co-founder and CEO Jagdeep Singh emphasized his company's willingness to expand into new, exciting market segments.
"While we have historically focused on automotive applications, we believe our battery technology is broadly applicable and can play a role in other sectors contributing to a lower-carbon future," Singh clarified.
The Future of Electrified Transportation
In order to remain competitive, QuantumScape can't simply rely on its previous innovations. The company must continually test and re-test its products, and strive for better performance.
Fortunately, QuantumScape is willing to push the envelope, time and again. As evidence of this, the company released some truly impressive data for QuantumScape's fast-charging battery cells.
According to the press release, QuantumScape's battery cells have "completed 400 consecutive 15-minute fast-charging (4C) cycles from 10% to 80% of the cell's capacity while retaining well above 80% of the initial energy." This, the company asserts, is "a first for this type of battery technology."
If you feel that fast-charging batteries are crucial to the EV battery market, then this news should convince you of QuantumScape's dominant position within the industry.
In light of his company's irrefutable fast-charging battery results, Singh sang the praises of his company's potentially game-changing technology.
"We believe innovations like this are crucial to narrowing the performance gap between EVs and combustion-engine based vehicles, and represent the future of the electrified transportation sector," the CEO explained.
The Bottom Line
Singh's bragging is justifiable, given the just-released data points. Moreover, QuantumScape's joint venture with Fluence Energy could prove to be mutually beneficial.
Still, don't expect QS stock to double quickly, even if this has happened in the past. The stock will thrust in both directions, shaking out the weaker hands along the way.
If you're prepared to accept the volatility, then there's really no need to wait for QuantumScape's earnings release. The future of EV battery technology is evolving, and there will be growing pains along the way. Yet, there could be enormous rewards for patient investors.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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