Friday, 5 January 2024

QuantumScape Stock Is Surging on Big News Today — Is It a Buy for 2024?

by Earn Media

QuantumScape (NYSE: QS) stock roared higher in Thursday morning’s trading. The battery technology specialist’s share price was up 25.3% as of 10:50 a.m. ET, according to data from S&P Global Market Intelligence.

Volkswagen‘s PowerCo subsidiary announced that it had completed a test of QuantumScape’s solid-state lithium battery for electric vehicles (EVs), and the results were encouraging. The test found that the technology could be used to power up to 500,000 kilometers of travel in an EV with barely any loss of charge capacity and driving range.

Is QuantumScape stock a buy for 2024?

Despite its recent rally, QuantumScape stock is still down roughly 94% from its peak. The results from the PowerCo test suggest that the battery specialist’s tech could be included in Volkswagen’s EVs at some point down the line. If and when that occurs, it could trigger a huge rebound for the stock.

QuantumScape Stock Is Surging on Big News Today -- Is It a Buy for 2024?

QS data by YCharts.

Early results for QuantumScape’s lithium battery prototype have shown promise — demonstrating high-level fast charging and battery capacity loss below 1% after 100 charging cycles. Previous tests have shown that the company’s batteries retained well over 80% of their initial charging capacity after 400 charging cycles — the equivalent of roughly 160,000 total driving miles.

QuantumScape’s tech is capable of fast charging from 10% battery to 80% battery in 15 minutes, and also suffers from less of the capacity loss that is typically incurred by fast charging. With most EV batteries currently on the market taking roughly 30 minutes to achieve the same fast-charging result and having significantly worse long-term capacity trade-offs, QuantumScape could be on the verge of delivering market-shaping improvements for battery tech.

Its solid-state lithium batteries should also last significantly longer than current offerings, if they make it to market. Batteries are the most expensive component of an electric vehicle, and delivering superior lifecycle and safety performance could help spur accelerated adoption of electric vehicles.

QuantumScape stock could go on to deliver explosive gains from here, but investors should understand that it’s a high-risk, high-reward play. The business remains in a pre-revenue state and continues to rack up significant losses.

Should you invest $1,000 in QuantumScape right now?

Before you buy stock in QuantumScape, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and QuantumScape wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of December 18, 2023

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Volkswagen Ag. The Motley Fool has a disclosure policy.