What caused QuantumScape stock to crash 17% today?
Several key factors are behind the dramatic drop in QuantumScape shares:
1. Profit-taking after a monster rally
QuantumScape shares had soared over +50% in just one week after the company revealed early production of its proprietary “Cobra” separator. This technology is a crucial component in solid-state lithium-metal batteries, which are expected to outperform conventional lithium-ion cells in energy density, safety, and charging speed.
- Cobra separator features:
- 25x faster heat-treatment process
- 80% smaller footprint vs prior techniques
- Designed for scalable solid-state cell production
Despite no major commercial breakthrough, the mere prospect of manufacturing advancements sent traders into a buying frenzy. But as the stock climbed from around $9.50 to over $14.50 within days, short-term investors likely took profits, triggering the sharp correction.
2. Valuation concerns resurface
Even after years of R&D, QuantumScape remains a pre-revenue company. It continues to burn cash and has not yet secured large-scale commercial contracts. The company’s market cap reached nearly $7 billion last week despite zero product deliveries or income.
- Market Cap (July 19): ~$6.9 billion
- 2024 Q1 Net Loss: $124.6 million
- Cash on hand: $1.03 billion (as of March 31)
This disconnect between market cap and revenue reality made many institutional investors wary. As retail hype faded, fundamentals took over.
3. Broader EV and battery sector weakness
QuantumScape’s sell-off also reflects broader uncertainty across the EV supply chain. Several major automakers—including GM and Ford—have recently slowed their EV production plans amid weakening demand and tightening margins. This cautious industry tone has trickled down to upstream suppliers like QuantumScape, which depend heavily on future OEM contracts that may now be delayed or reduced.
4. Short-seller pressure and high volatility
QS remains one of the most volatile battery stocks on Wall Street, attracting heavy options trading and short interest. As of last week, over 18% of the float was sold short—amplifying the downward move when momentum reversed.
- Short Interest: ~18.3% of float
- Beta (5Y Monthly): 5.17 (extremely volatile)
- 52-week range: $4.92 – $15.40
Monday’s trading volume surpassed 60 million shares, more than 6× its average daily volume, underscoring the sell-off’s intensity.
Is this a healthy correction or a warning sign?
Analysts and Reddit investors seem to agree: this drop is likely a healthy correction after a hype-fueled rally. But it’s also a reminder that QuantumScape remains a speculative play, highly sensitive to headlines, sentiment, and long-term timelines.
If you’re a long-term investor, here are two things to watch:
- Q2 2025 Earnings (July 23): Investors are awaiting updates on partnerships, production timelines, and capital expenditures.
- Cobra technology rollout: If QuantumScape can provide concrete proof of scaled-up Cobra separator production, the stock could regain momentum.
What does RSI over 90 really mean for these hot stocks?
The Relative Strength Index (RSI) is a momentum indicator ranging from 0 to 100. A stock is considered overbought when its RSI exceeds 70 — and anything above 90 is rare and often unsustainable. Currently:
- QuantumScape (QS) has an RSI of 90.92
- Cogent Biosciences (COGT) sits at 90.74
- Opendoor Technologies (OPEN) posts 90.82
These sky-high RSI numbers suggest that while these stocks are in strong uptrends, they may be due for a near-term correction or at least some consolidation.
Why is QuantumScape (QS) under the technical scanner?
QuantumScape shares ended Friday up 7.65% at $14.64, marking a massive 164.26% year-to-date gain and 84.15% over the past year. Technical indicators, including its MACD line at 2.10 and moving averages, point to a bullish trend. However, with RSI now approaching unsustainable levels, the momentum could slow down.
In premarket trading Monday, QS dropped 3.96%, signaling possible cooling off. That said, the company continues to make headlines — especially after its latest collaboration with Murata Manufacturing Co. to further its solid-state battery technology. QS is betting big on becoming a key player in the electric vehicle revolution.
Is QuantumScape still a long-term buy?
QuantumScape’s dream of commercializing solid-state batteries is transformative but still several years away. The recent stock swing is a classic case of “buy the rumor, sell the news” in a high-risk, high-reward sector.
Investors should weigh:
- The company’s cash runway (estimated into 2026)
- Upcoming milestones (like prototype deliveries to OEMs)
- Broader EV demand trends
While the 17% drop may feel alarming, it’s not necessarily bearish in the long term—as long as QuantumScape can keep delivering on its promises.
What’s behind Opendoor Technologies’ explosive 36% surge?
Opendoor Technologies (OPEN) jumped 36.36% on Friday, closing at $2.25. It’s up 41.51% year-to-date, although still down 10.71% over the past year. Technicals remain solid, with its MACD and SMA metrics confirming momentum. But the RSI nearing 91 is a strong warning.
According to Benzinga Edge Rankings, OPEN has the strongest short-, medium-, and long-term price trend, with a value ranking in the 76.19th percentile. In premarket action on Monday, OPEN was already up another 19.11%, reflecting continued bullish interest.
However, such vertical rallies, when paired with extreme RSI, often end in either a sharp pullback or a sideways grind.
Is Cogent Biosciences (COGT) still a solid momentum play?
Cogent Biosciences (COGT) ended Friday up 2.38% at $12.49, logging a 60.13% YTD gain and 43.73% return over the past year. Its MACD line stands at 1.48, reinforcing bullish momentum. While the SMA data shows the price is above trend levels, the RSI of 90.74 points to potential exhaustion.
Premarket on Monday saw COGT up another 2.00%, riding the biotech rally wave. But with momentum indicators stretched, traders may start taking profits soon.
Are investors ignoring the red flags in this rally?
While RSI alone isn’t a sell signal, historical data shows that stocks trading above 90 RSI levels often experience short-term corrections. These stocks — QuantumScape, Opendoor, and Cogent — are clearly on strong bullish runs, driven by news flow, partnerships, and investor enthusiasm.
But when all momentum signals are maxed out, caution is wise. Even the anonymous derivatives trader Heisenberg (@Mr_Derivatives) hinted on X, “Extrapolate how you see fit,” suggesting that savvy traders should read between the lines.
Should you buy, sell, or wait on these stocks?
Here’s the bottom line:
- QuantumScape (QS) is a strong EV battery play with major upside, but its RSI signals that it might cool off short-term.
- Opendoor (OPEN) is seeing aggressive buying, but RSI and YTD returns suggest it’s due for a pause or pullback.
- Cogent Biosciences (COGT) has solid fundamentals and momentum, but again, RSI near 91 could bring volatility.
Short-term traders should prepare for volatility, while long-term investors might want to wait for better entry points. As always, use multiple indicators, not just RSI, before making decisions.
For comparison, broader indexes are also showing strength: The SPDR S&P 500 ETF (SPY) was down 0.27% in premarket at $629.30, while the Invesco QQQ ETF (QQQ) rose 0.30% to $562.96, according to Benzinga Pro.
FAQs:
Q1: Why is QuantumScape stock considered overbought now?
QuantumScape’s RSI is over 90, which usually signals the stock is overbought and may pull back soon.
Q2: Is Opendoor a good buy after its huge price jump?
Opendoor’s high RSI suggests caution, as such rapid gains often lead to short-term corrections.
