Velo3D Soars 36% on Aerospace Breakthrough and Defense Sector Momentum: What’s Fueling This Volatile Surge?

Summary
• Velo3D (NASDAQ:VELO) surges 36.03% intraday to $8.96, hitting its 52-week high of $9.25
• Mears Machine’s aerospace delivery using Velo3D’s Sapphire XC system sparks post-hours frenzy
• CEO confirms SpaceX Raptor engine integration and Anduril collaboration, driving speculative fervor
• Q3 revenue beats estimates, but EBITDA remains negative at -$7.3M
• Velo3D’s stock trades 43% above its 50-day moving average, signaling short-term bullish momentum

Velo3D’s explosive 36% intraday rally has ignited market speculation, driven by a confluence of aerospace milestones, defense sector alignment, and strategic partnerships. The stock’s surge to its 52-week high of $9.25 reflects investor optimism around additive manufacturing’s role in national security and space exploration. With the U.S. defense budget prioritizing AM innovation and Velo3D securing key contracts with the Navy and SpaceX, the stock’s volatility underscores its position at the intersection of cutting-edge technology and geopolitical demand.

Aerospace Milestone and Defense Sector Synergy Ignite Short-Term Volatility
Velo3D’s 36% intraday surge is directly tied to Mears Machine Corporation’s delivery of aerospace gas turbine hardware using Velo3D’s Sapphire XC system, a critical step in validating the company’s additive manufacturing (AM) capabilities for high-stakes applications. The partnership’s success in producing Haynes 282 and Inconel 718 components—subjected to specialized HIP and heat treatment—demonstrates Velo3D’s ability to meet stringent aerospace tolerances. Simultaneously, CEO Arun Jeldi’s confirmation of SpaceX Raptor engine integration and Anduril collaboration has amplified speculative demand. These developments align with the U.S. defense sector’s $1.7T budget focus on AM for rapid prototyping and supply chain resilience, positioning Velo3D as a key player in a $5.4B market by 2030.

Industrial Machinery Sector Mixed as Velo3D Outpaces Peers
The industrial machinery sector, led by 3D Systems (DDD), has seen mixed performance, with DDD up 2.54% intraday. However, Velo3D’s 36% surge far outpaces sector averages, driven by its niche focus on defense and aerospace AM. While DDD and peers like Stratasys (SSYS) face broader market skepticism, Velo3D’s strategic alignment with high-margin defense contracts and space exploration creates a divergent trajectory. The sector’s broader challenges—rising material costs and regulatory scrutiny—contrast with Velo3D’s tailored growth narrative.

Options and ETF Playbook: Capitalizing on Velo3D’s Volatility and Technical Momentum
• Technical Indicators:
- 50-day MA: $5.15 (below current price of $8.96)
- 200-day MA: $4.53 (well below)
- RSI: 70.53 (overbought)
- MACD: 0.305 (bullish divergence)
- Bollinger Bands: Price at upper band ($6.60 vs. $8.96)

Velo3D’s technicals suggest a continuation of its short-term bullish trend, with key resistance at $9.25 (52-week high) and support at $6.90 (intraday low). The stock’s 43% premium over its 50-day MA and 62.5% over the 200-day MA indicate strong momentum, though the overbought RSI (70.53) signals potential near-term consolidation. Traders should monitor the 52-week high as a critical level for trend validation.

Options Analysis:
• VELO20260116P7.5 (Put Option):
- Strike Price: $7.50
- Expiration: 2026-01-16
- IV Ratio: 29.10% (moderate)
- LVR: 1819.00% (extreme leverage)
- Delta: -0.016 (low sensitivity)
- Theta: -0.00028 (minimal time decay)
- Gamma: 0.0466 (moderate sensitivity to price moves)
- Turnover: 0 (illiquid)
- Payoff (5% upside to $9.41): $0 (strike below current price)
- Why it stands out: This put option offers extreme leverage but is illiquid and unsuitable for a bullish scenario. Avoid unless bearish.

• No viable call options in provided chain: The absence of liquid call options limits bullish exposure. Traders should consider ETFs or direct stock entry.

Action Plan: Aggressive bulls may initiate long positions near $8.96 with a stop-loss at $6.90. Given the stock’s overbought RSI and proximity to its 52-week high, a breakout above $9.25 could trigger a retest of $9.50. For options, the provided chain lacks viable call contracts; consider ETFs like XRT (iShares Robotics & Tech ETF) for sector exposure.

Backtest Velo3D Stock Performance
The backtest of VELO's performance following a 36% intraday surge from 2022 to now shows 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 such a substantial initial increase.

Velo3D’s Aerospace Breakthrough: A High-Risk, High-Reward Catalyst for 2026
Velo3D’s 36% intraday surge is a testament to its strategic positioning in the defense and aerospace additive manufacturing boom. With the U.S. Navy, SpaceX, and Anduril solidifying its role in critical infrastructure, the stock’s technicals and fundamentals align for a potential breakout. However, the overbought RSI and lack of liquid call options highlight the need for caution. Investors should monitor the 52-week high of $9.25 and the $6.90 support level. For sector context, 3D Systems (DDD) is up 2.54% intraday, but Velo3D’s niche focus offers higher growth potential. Act now: Position for a breakout above $9.25 or secure a stop-loss below $6.90 to navigate this volatile catalyst.