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QuantumScape (QS) shares are up some 30% on Wednesday after the next-gen lithium battery specialist said it has achieved a significant milestone in the ramp-up of its manufacturing capacity.
In a press release this morning, the NYSE-listed firm confirmed “the successful integration of its advanced Cobra separate process into baseline cell production.”
Despite today’s surge, QuantumScape stock remains down about 15% versus its year-to-date high.
Why Are QS Shares Rallying on Cobra Integration News?
QuantumScape’s successful integration of the Cobra separator process marks a pivotal leap toward commercializing its solid-state battery technology.
Cobra improves heat treatment speed by about 25 times and meaningfully reduces equipment footprint as well to enable faster, more scalable, and cost-efficient production – all of which represent key hurdles in bringing next-gen batteries to market.
Cobra replaces the Raptor process to become the new manufacturing baseline, setting the stage for higher-volume B1 sample production and future iterations.
In short, today’s announcement is a material catalyst for QS shares as it signals the company based out of San Jose, California is transitioning from prototype to industrial readiness – a shift that could strengthen its competitive edge and accelerate its path to revenue generation.
William Blair Remains Unimpressed on QuantumScape Stock
Despite the Cobra integration news, Jed Dorsheimer, a William Blair analyst, reiterated his “Market Perform” rating on QuantumScape stock.
Dorsheimer sees today’s rally in QS shares as “overdone” as the Cobra integration was “a known milestone and not a surprise to investors.”
In his research note, the analyst recommended caution also because the battery stock has a history of overreacting to developments and then “fading back to prior levels” soon after.
Wall Street Has a Consensus ‘Hold’ Rating on QuantumScape
Other Wall Street firms also recommend avoiding QS stock following Wednesday’s surge.
The consensus rating on QuantumScape shares currently sits at “Hold” only with the mean target of $4.79 indicating potential downside of about 17% from current levels.
