Velo3D (VELO) shares are pulling back Thursday, and it's not because anything went wrong. The metal 3D printing company's stock is down about 7% in afternoon trading, settling around $19.53. But that comes after a massive 50% surge on Wednesday, which itself was part of a 316% run over the past six months. Investors are simply taking some chips off the table.
The broader market is actually having a decent day — the Nasdaq is up 0.97% and the S&P 500 has gained 0.96% — so this is very much a Velo3D story.
What Sparked the Rally?
Wednesday's jump was fueled by a first-quarter earnings report that blew past expectations. Velo3D reported a loss of 20 cents per share, far better than the 48-cent loss analysts had predicted. Revenue came in at $13.82 million, up 48% from last year and well above the $9.85 million consensus. Management credited higher system shipments and strong demand from aerospace and defense customers.
The company also maintained its 2026 revenue guidance of $60 million to $70 million, which gave investors confidence the momentum can continue.
Short Squeeze Added Fuel
There's another factor that likely amplified Wednesday's move: short interest. Over 25% of Velo3D's float was sold short, meaning a lot of traders were betting against the stock. When the earnings report came in strong, those short sellers rushed to cover their positions, creating a wave of buying pressure that pushed the stock as high as $21.38.
Defense Contracts Are the Real Story
Beyond the quarterly numbers, Velo3D's backlog has grown to $30 million, up from $18 million a year ago. The company recently secured an $11.5 million contract with a U.S. defense prime and a $9.8 million deal with the Defense Logistics Agency. These contracts provide a solid foundation for future revenue and suggest the company is gaining traction in critical sectors.
Where Does the Stock Go From Here?
From a technical perspective, Velo3D is still extended. The stock is trading 39.6% above its 20-day moving average of $14.11 and 54.9% above its 50-day moving average of $12.72. The relative strength index (RSI) sits at 70.98, which is just above the threshold that some traders consider overbought.
That said, the longer-term trend remains bullish — the 20-day moving average is still above the 50-day, which is a positive signal. Key resistance to watch is $23.84, while support sits at $14.11.
For now, it looks like Velo3D is just catching its breath after a sprint. The fundamentals are strong, but after a 50% one-day move, a little profit-taking is perfectly normal.
