Velo3D's Strategic Military Collaboration: A Catalyst for Long-Term Growth in Additive Manufacturing

The U.S. defense sector is undergoing a quiet revolution, driven by the urgent need to modernize its industrial base and counter global supply chain vulnerabilities. At the forefront of this transformation is Velo3D (NASDAQ: VELO), a company leveraging additive manufacturing (AM) to redefine how mission-critical components are produced for the military. With a $6 million contract from the U.S. Navy to qualify copper nickel (CuNi) alloy for its Sapphire XC printer, Velo3D is not just securing a niche in the defense supply chain—it is positioning itself as a linchpin in the broader shift toward industrial modernization.

The Strategic Value of Additive Manufacturing in Defense

The Department of Defense (DoD) has allocated $1.8 billion to additive manufacturing in FY 2025, with plans to increase this to $3.3 billion in FY 2026. This surge reflects a recognition that AM is no longer a niche technology but a strategic imperative. Traditional manufacturing methods for defense components—such as casting and machining—are plagued by long lead times, high costs, and supply chain bottlenecks. Additive manufacturing, by contrast, enables rapid prototyping, on-demand production, and the creation of complex geometries that were previously impossible.

Velo3D's partnerships with the Navy, Army, and other defense agencies exemplify this shift. Its work with the U.S. Navy to qualify CuNi alloy for the Sapphire XC printer addresses a critical need: the ability to repair and replace ship components quickly. CuNi is essential for naval applications due to its corrosion resistance in seawater, but traditional casting methods for this material are slow and costly. Velo3D's Rapid Production Solution (RPS) promises to reduce lead times by up to 70%, according to internal estimates, while ensuring supply chain independence by sourcing materials domestically.

Industrial Base Modernization: A Win-Win for Velo3D and the DoD

The DoD's Industrial Base Analysis and Sustainment (IBAS) program, which received $1.01 billion in FY 2025, underscores the military's focus on building a resilient industrial base. Velo3D's collaborations align perfectly with this goal. For instance, its partnership with the Army's DEVCOM AvMC to optimize Aluminum CP1 for high-throughput AM processes is a direct response to the Army's Integrated Air and Missile Defense (IAMD) modernization priorities. By developing scalable, repeatable AM processes, Velo3D is helping the Army reduce costs and improve operational readiness.

Moreover, Velo3D's CRADA with NAVAIR labs to characterize advanced materials for flight systems highlights its role in bridging the gap between AM innovation and real-world defense applications. The company's Intelligent Fusion manufacturing process—combining Flow software, Sapphire printers, and Assure quality control—ensures that parts meet the stringent standards required for aerospace and naval hardware. This capability is a differentiator in a sector where reliability and performance are non-negotiable.

A Growing Ecosystem of Partnerships

Velo3D's strategic alliances extend beyond the DoD. Its collaboration with Ohio Ordnance Works (OOW) to develop 3D-printed military weapons demonstrates the company's ability to adapt its technology to diverse defense needs. By optimizing weapon components for additive manufacturing, Velo3D is helping OOW streamline its design process and meet the demanding performance requirements of the military. This partnership also signals a broader trend: the integration of AM into the full spectrum of defense production, from ship repairs to firearms.

The company's cybersecurity-compliant systems further enhance its appeal to the DoD. As additive manufacturing becomes more integrated into defense operations, securing the digital supply chain is paramount. Velo3D's printers are designed to meet DoD cybersecurity standards, ensuring that sensitive manufacturing data remains protected. This is a critical advantage in an era where cyber threats are as much a concern as physical vulnerabilities.

Investment Implications: A High-Growth Play in a Strategic Sector

Velo3D's military contracts and technological edge position it as a compelling long-term investment. The DoD's FY 2026 budget, with its 83% increase in AM funding, suggests that the company's current projects are just the beginning. As the military accelerates its adoption of additive manufacturing, Velo3D's expertise in qualifying critical materials and scaling production processes will become increasingly valuable.

For investors, the key risks include market saturation in the AM sector and the potential for regulatory delays in material qualification. However, Velo3D's focus on defense—a sector with stable, long-term demand—mitigates many of these concerns. The company's ability to secure contracts with multiple branches of the military and its partnerships with industry leaders like RTX and America Makes further strengthen its competitive position.

Conclusion: A Catalyst for Sustainable Value Creation

Velo3D's strategic military collaborations are more than just revenue drivers; they are a testament to the transformative potential of additive manufacturing in defense. By addressing the DoD's most pressing challenges—supply chain resilience, rapid prototyping, and industrial base modernization—Velo3D is not only securing its place in the defense sector but also laying the groundwork for sustainable growth. For investors seeking exposure to a high-conviction, long-term trend, Velo3D represents a compelling opportunity to capitalize on the next industrial revolution.