Velo3D Inc. (VELO) shares took a beating Thursday, dropping double digits as short sellers ramped up their bets against the 3D-printing company. The sell-off comes even as the broader market declined, with the Nasdaq down 1.60% and the S&P 500 shedding 1.12%.

Short Sellers Make Their Move

The latest data shows short interest in Velo3D jumped from 2.09 million shares to 2.51 million during the most recent reporting period. That puts over 20% of the company's publicly available float in short positions—a substantial bearish bet by any measure.

Here's the math: with average daily trading volume running around 2.57 million shares, short sellers would need roughly one day to fully cover their positions. Not a ton of time, but enough to create volatility if something forces them to exit quickly.

The Army Connection

The irony here is that this bearish pressure arrives right after some genuinely positive news. Earlier this week, Velo3D became the first qualified 3D-printing vendor for the U.S. Army's Ground Vehicle Systems Center. That designation means the company can now produce critical components in Aluminum CP1 and Inconel 718 for ground combat vehicles—the kind of specialized manufacturing work that tends to come with fat margins.

Defense Deals Keep Coming

Adding to the positive narrative, strategic partner Mears Machine Corporation announced on Feb. 2 that it secured a 10-year, $100 million revenue agreement with a major U.S. defense OEM. The kicker? Mears will use its fleet of Velo3D Sapphire XC printers to fulfill the contract, essentially creating a multi-year revenue stream for Velo3D's technology.

What the Charts Say

The technical picture tells a story of near-term pain with some longer-term hope. Velo3D is trading 25.4% below its 20-day simple moving average and 16.8% below its 50-day average—classic bearish signals. But zoom out to the 100-day moving average, and the stock sits 23.2% above that level, suggesting the longer-term trend hasn't completely collapsed.

The RSI comes in at 45.49, which is neutral territory—not oversold, not overbought. Meanwhile, the MACD is sitting below its signal line, confirming that bearish momentum. Mixed signals, but leaning negative in the short run.

• Key Support: $10.00
• Key Resistance: $15.00

Earnings on the Horizon

Velo3D is scheduled to report earnings on Feb. 26, which should clarify whether the military contracts are translating into actual revenue growth.

• EPS Estimate: Loss of 50 cents
• Revenue Estimate: $8.50 million

What Analysts Think: The consensus rating is Buy with an average price target of $18.00—a significant premium to current levels. Lake Street maintains a Buy rating and raised its target to $18.00 on Dec. 29, 2025.

VELO Price Action: Velo3D shares were down 10.87% at $11.23 at the time of publication Thursday.