QuantumScape's stock has a roller-coaster day. Here's what may be driving the volatility.

By Hannah Pedone and Emily Bary

Shares of the battery-technology company are heavily shorted, and the company just signaled flashes of business momentum

QuantumScape develops solid-state lithium-metal batteries.

QuantumScape's stock has been known to take volatile swings, and that's what investors saw in the wake of the battery company's first-quarter earnings report.

While QuantumScape (QS) didn't announce "completion of any goals" on its earnings call, the company did show glimmers of progress on several fronts, according to Evercore ISI analyst Chris McNally. QuantumScape's stock is heavily shorted and has a strong following among retail investors, two dynamics that could be contributing to the stock's extreme postearnings rally after the company signaled some business momentum.

Shares shot up 23% in Thursday morning action, but quickly lost most of that, closing the day up just 1.4%.

Heading into the report, QuantumScape's stock had fallen 30% on the year. McNally flagged that there had been a "dearth of new headlines" around the company in the first few months of 2026.

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Now retail investors seem encouraged by some of QuantumScape's commentary, which suggests the company could play a meaningful role in the data-center boom.

"Driven by massive compute demand, data centers are transitioning to 800-volt DC designs and adopting power systems architecture and technology from the electric-vehicle industry," CEO Siva Sivaram said on the earnings call. "We see this as a natural fit for our no-compromise solid-state battery."

Sivaram noted that QuantumScape's batteries are more energy dense than others on the market, meaning that the company "can enable increased compute density for AI factories."

The company has also seen "strong customer interest" in its batteries from military, aerospace and government customers, he said.

"Furthering the de-risking strategy, QuantumScape is placing resources behind new hot sectors like on-rack AI data centers, space and drones," William Blair analyst Jed Dorsheimer said in a note to clients. "To us, drones present the best opportunity."

QuantumScape is perhaps best known for its electric-vehicle batteries. McNally pointed out that the company disclosed completion of a "technology evaluation" with a top-10 automaker. That car manufacturer benchmarked QuantumScape's technology against other options, and now the two "are moving into the next phase of this engagement" with the ultimate intention of deploying QuantumScape's offerings, according to QuantumScape's shareholder letter.

The companies have yet to sign a joint development agreement. But if they do, QuantumScape would have JDAs with four of the top 10 global original equipment manufacturers, McNally wrote in a note to clients.

He expects shares to stay volatile given the significant short interest. FactSet lists short interest at 18.9% of the float. That's the highest level since January 2025, when it reached 19.2%, according to Dow Jones Market Data.

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-Hannah Pedone -Emily Bary

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04-23-26 1644ET