QuantumScape (NYSE: QS) rallied nearly 20% this morning after the solid-state lithium batteries specialist announced a strategic partnership with Corning Inc. (NYSE: GLW).
The two companies have agreed to co-develop ceramic separator manufacturing for QS’s solid-state batteries, but the financial terms of the agreement weren’t disclosed in the press release on Wednesday.
QuantumScape stock has been in a sharp uptrend over the past six months. At the time of writing, the EV battery stock is up more than 300% versus its year-to-date low in early April.
Why is Corning deal a positive for QuantumScape stock?
Teaming up with Corning marks a pivotal step in QuantumScape’s transition from R&D to scalable manufacturing.
Corning’s 170-year legacy in materials science and its proven capabilities in high-volume ceramics production offer QS a powerful ally in overcoming one of the most complex engineering hurdles in solid-state battery design.
In the press release, Dr Siva Sivaram, the firm’s chief executive, called Corning “an ideal addition to the QuantumScape technology ecosystem,” further underscoring the strategic fit.
The announced collaboration also aligns with QuantumScape’s capital-light strategy – outsourcing manufacturing rather than building costly infrastructure in-house. That lowers execution risk and accelerates commercialization.
For investors, this deal validates the company’s tech and signals growing institutional confidence in QS stock’s long-term potential.
Is valuation still a concern for QS shares?
QuantumScape’s enterprise value has dropped from over $15 billion in 2022 to roughly $2.0 billion today – a dramatic reset that reflects broader EV sector repricing.
But valuation alone shouldn’t deter investors. QS shares remain attractive as a long-term holding due to the following five reasons:
- A licensing deal with Volkswagen’s PowerCo that extends its cash runway into 2028.
- A capital-light business model that reduces manufacturing risks and lowers costs.
- Solid-state battery technology that offers superior performance and safety.
- Expanding use cases beyond electric vehicles into consumer electronics, expanding TAM.
- Capital discipline and consistent execution in terms of research and development.
While QuantumScape shares still aren’t inexpensive to own per se, these long-term tailwinds signal they could prove a lucrative investment over the next few years – especially as the management continues to hit strategic milestones.
Should you load up on QuantumScape today?
QuantumScape’s latest partnership with Corning Inc. adds another major layer of credibility to its commercialization efforts.
As the company continues to hit technical and strategic milestones, investor confidence may deepen – especially if future licensing deals or production benchmarks materialize.
For long-term investors willing to stomach volatility, QS shares offer exposure to a transformative technology with real industrial traction. The road to full-scale deployment is under construction, but the signs are pointing in the right direction.
That said, the stretched valuation still has QuantumScape stock rated “underweight” among Wall Street analysts at the time of writing.
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