Velo3D Soars 34% on Aerospace Breakthrough: What’s Fueling This Volatile Surge?

Summary
• Velo3D (VELO) surges 34.45% intraday to $8.86, hitting its 52-week high of $9.25
• Mears Machine’s aerospace hardware delivery using Velo3D’s Sapphire XC system sparks investor frenzy
• Q3 2025 revenue jumps 65% to $13.6M, with 48% of bookings from defense/space sectors

Velo3D’s stock is in a tailwind-driven frenzy, surging 34.45% in a single trading session. The catalyst? A landmark aerospace hardware delivery by Mears Machine Corporation, leveraging Velo3D’s additive manufacturing (AM) technology. With the stock trading near its 52-week high and a dynamic PE of -2.73, the market is betting on a defense and space sector renaissance. But can this momentum sustain, or is it a flash in the pan?

Aerospace Hardware Delivery Ignites Investor Optimism
The surge in Velo3D’s stock is directly tied to Mears Machine Corporation’s successful delivery of a complete aerospace gas turbine hardware set to a new customer. This project, featuring components printed on Velo3D’s Sapphire XC system, marks a critical validation of the company’s technology in high-stakes aerospace applications. The delivery included Haynes 282 and Inconel 718 components, which underwent specialized heat treatments for rotating applications. Mears’ CEO highlighted that growth prospects 'significantly exceed existing print capacity,' signaling potential for recurring revenue and expanded partnerships. This development, coupled with Velo3D’s Q3 revenue beat and defense sector bookings, has reignited investor confidence in its RPS model and long-term AM market capture.

Defense and Aerospace Sector Gains Momentum
The aerospace and defense sector is experiencing a surge in innovation and capital allocation, driven by U.S. government priorities like the $1.7T 2025 defense budget. Velo3D’s partnerships with the U.S. Navy (CuNi alloy qualification) and SpaceX (Raptor engine components) position it as a key player in additive manufacturing for mission-critical applications. Sector peers like Lockheed Martin (LMT) and Boeing (BA) are also benefiting from defense spending, but Velo3D’s vertically integrated RPS model and focus on AM for high-complexity parts create a unique value proposition. The sector’s 0.899% intraday gain for LMT underscores the broader tailwinds, though Velo3D’s volatility reflects its speculative, growth-oriented profile.

Options and ETF Strategy for a Volatile Bull Run
• Kline Pattern: Short-term bullish trend (confirmed)
• MACD: 0.305 (bullish), Signal Line: 0.153, Histogram: 0.152 (positive divergence)
• RSI: 70.53 (overbought, potential pullback risk)
• Bollinger Bands: Price at upper band ($6.60), suggesting overextension

Velo3D’s technicals paint a mixed picture: a strong short-term bullish trend is evident, but the RSI at 70.53 warns of overbought conditions. Key support/resistance levels at $4.39–$4.44 (30D) and the 52-week high of $9.25 are critical to monitor. The stock’s 43.1% above its 50-day MA and 62.5% above the 200-day MA reinforce its bullish momentum, though liquidity risks persist due to its low turnover rate (44.3%).

Options Analysis:
• VELO20260116P7.5 (Put Option):
- Strike Price: $7.50
- Expiration: 2026-01-16
- Delta: -0.0185 (low sensitivity to price moves)
- Gamma: 0.0626 (moderate sensitivity to price acceleration)
- IV Ratio: 25.40% (low volatility, limited premium decay)
- Theta: -0.0002 (minimal time decay)
- LVR: 1766.00% (extreme leverage, high-risk/high-reward)
- Turnover: 0 (illiquid)
- Payoff (5% upside to $9.30): $1.80 (max gain if price stays above $7.50)
- Why it stands out: The 1766% leverage ratio makes this contract a speculative bet for aggressive bulls, though its illiquidity and low delta limit practicality.

Trading Setup: Aggressive bulls may consider the VELO20260116P7.5 put option for a high-leverage play, but caution is advised due to its illiquidity. A more balanced approach involves targeting a pullback to the 30D support ($4.39–$4.44) for a long entry, with a stop-loss below $6.90 (intraday low). The 52-week high of $9.25 remains a critical resistance level to watch for a potential breakout.

Backtest Velo3D Stock Performance
The backtest of VELO's performance after a 34% intraday surge from 2022 to the present reveals favorable results. The 3-Day win rate is 58.33%, the 10-Day win rate is 63.89%, and the 30-Day win rate is 86.11%, indicating a high probability of positive returns in the short term. The maximum return during the backtest was 44.81% over 30 days, suggesting that VELO can deliver significant gains even after a substantial intraday surge.

Velo3D’s Aerospace Breakthrough: A High-Risk, High-Reward Play
Velo3D’s 34.45% intraday surge is a testament to the market’s belief in its aerospace and defense partnerships, particularly with Mears Machine and the U.S. Navy. While the stock’s technicals suggest a strong short-term bullish trend, the overbought RSI and low liquidity pose risks. Investors should monitor the 52-week high of $9.25 and the 30D support levels for directional clues. With the sector leader, Lockheed Martin (LMT), up 0.90%, the broader defense and aerospace tailwinds remain favorable. For those with a high-risk appetite, the VELO20260116P7.5 put option offers extreme leverage, but prudence is key in this volatile name. Action Insight: Watch for a $9.25 breakout or a pullback to $4.40 for a strategic entry.