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Forbes
5 days ago
- Automotive
- Forbes
QuantumScape: 40x Upside For QS Stock?
GERMANY - 2024/12/20: In this photo illustration, a person is holding a smartphone with the logo of ... More US battery company QuantumScape Corporation on screen. (Photo Illustration by Timon Schneider/SOPA Images/LightRocket via Getty Images) QuantumScape stock surged 75% this week following the company's announcement of a breakthrough in manufacturing. The recent advancement with the Cobra separator signifies more than just a manufacturing achievement—it positions the company as a leader in a vast market opportunity. This innovative process achieves heat treatment speeds that are 25 times faster while occupying significantly less space, addressing crucial scalability issues that have long impeded the commercialization of solid-state batteries. For more details, see our previous analysis on – QuantumScape: What's Happening With QS Stock?. This note focuses on the potential for QS stock to appreciate. However, if you're seeking an upside with a smoother experience than picking an individual stock, you might want to consider the High Quality Portfolio, which has outperformed the S&P and achieved returns greater than 91% since inception. Also, check out – What's Happening With BBAI Stock? The Market Opportunity The timing of QuantumScape's technological advancement coincides with remarkable growth in the U.S. electric vehicle market. BloombergNEF forecasts that U.S. passenger EV sales will grow from 1.6 million in 2024 to 4.1 million by 2030, indicating a compound annual growth rate exceeding 17%. Capturing just 25% of this target market by 2030 would equate to around 1 million vehicles sold annually. With an estimated $10,000 per battery pack, this translates to a $10 billion revenue potential for QuantumScape. The figures become even more enticing when considered through the lens of production capacity. QuantumScape is projecting a production capacity of 90 GWh in the years to come. Based on industry estimates of $120 per kWh, this capacity could yield approximately $11 billion in gross revenue. Valuation Disconnect The current market capitalization of QuantumScape is approximately $4 billion, presenting a notable valuation opportunity. The company is trading at merely 0.4 times its potential revenues for 2030—a significant discount for a technology leader poised to grow from nothing to over $10 billion in revenue within a few years. High-growth technology firms usually command revenue multiples ranging from 15 to 30 times during periods of rapid expansion. Historical examples such as Zoom, Shopify, and Snowflake have been valued at multiples between 50 and 200 during peak growth phases. While Tesla reached a peak valuation multiple of 30, it has lately come down to nearly 10x. Even applying a conservative revenue multiple of 15x to QuantumScape's projected $10 billion in revenue for 2030 suggests a potential valuation of $150 billion—around 40 times current levels. Competitive Advantages QuantumScape's technology provides significant advantages over traditional lithium-ion batteries: quicker charging, extended range, improved safety, and greater longevity. The company's collaboration with PowerCo offers a direct pathway to mass production via Volkswagen's established automotive supply chain, thus mitigating the commercialization risks typically associated with emerging battery technologies. The Cobra manufacturing breakthrough specifically targets the industry's two largest challenges: production scalability and cost efficiency. This technological advantage may prove hard for competitors to duplicate quickly, potentially solidifying QuantumScape's early market dominance. Risk Considerations Despite the compelling upside case, investors need to consider significant risks. The complexity of manufacturing remains considerable—achieving gigawatt-hour production introduces numerous technical challenges that extend beyond the Cobra process. The company is also up against fierce competition from well-capitalized adversaries such as Toyota, Samsung, and LG Chem, all of which possess established manufacturing capabilities and supply chain networks. QuantumScape's strong reliance on the PowerCo partnership poses concentration risk, while the company's annual operating losses of $517 million and its pre-revenue status necessitate continued access to capital. Historically, the market adoption of new battery technologies tends to proceed more slowly than anticipated, which could postpone revenue generation. Technical risks persist regarding the validation of real-world performance at scale, cost competitiveness with existing lithium-ion technologies, and the security of supply chains for the specialized materials needed for mass production. Investment Verdict The investment case for QuantumScape revolves around asymmetric risk-reward dynamics. While the execution risks are considerable, the company's current valuation seems to fully discount the possibility of success. The intersection of groundbreaking manufacturing technology, substantial market growth, and solid commercialization partnerships creates a highly favorable scenario that far outweighs the existing market valuation. For investors prepared to accept the risks associated with development stages, QuantumScape offers exposure to potentially transformative battery technology at what appears to be a considerable valuation discount relative to its long-term revenue prospects. Nevertheless, it is vital for investors to thoughtfully weigh these risks as well. Now, we implement a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio, featuring a collection of 30 stocks that has a strong track record of outperforming the S&P 500 over the last four years. Why is that? Collectively, HQ Portfolio stocks have offered better returns with lower risk compared to the benchmark index; a smoother ride, as demonstrated in HQ Portfolio performance metrics.
Forbes
28-03-2025
- Entertainment
- Forbes
YouTube Just Changed What A ‘View' Means — But Don't Celebrate Just Yet
GERMANY - 2024/09/25: In this photo illustration, a smartphone with the logo of short video sharing ... More service YouTube Shorts seen in front of business website. (Photo Illustration by Timon Schneider/SOPA Images/LightRocket via Getty Images) There's been a lot of noise this week about YouTube Shorts 'view count inflation.' But let's be clear: this change is more about optics than impact. YouTube's new policy, effective March 31, shifts the definition of a view to match what already exists on TikTok and Instagram Reels — counting a view the moment a video starts playing or replays. Superficially, this makes creators look like they're getting more views. But here's the catch: the actual amount of time audiences are spending watching Shorts isn't changing. It's the definition that's looser. If this sounds familiar, it should. It's straight out of the Facebook playbook. Back in 2015-16, Facebook aggressively promoted video by showcasing eye-popping view counts — sometimes millions per video. But these were often just impressions, far removed from the meaningful 30-second views that YouTube required on long-form content. It inflated the sense of reach and engagement, misleading creators and advertisers alike. YouTube, ironically, is now adopting the same strategy — repackaged for Shorts. Previously, YouTube counted a Shorts view only after a few seconds of watch time — not as long as the 30 seconds required for long-form videos, but still enough to filter out a meaningless scroll. Now, a view is counted the instant a video plays. If it loops (as Shorts often do), each new cycle counts again. This change brings YouTube into alignment with TikTok and Reels, which also count any autoplay as a view. On paper, it means creators will suddenly see much higher view counts. But that's not because they've cracked the algorithm or created better content — it's because YouTube moved the goalposts. Importantly, YouTube is preserving the original metric under a new name: 'engaged views.' This is the stat that matters — not just for creators trying to build real audience relationships, but also for monetization. Revenue sharing and Partner Program eligibility will still be based on engaged views. YouTube says it made the change in response to creators asking for better visibility into how often their content is seen. That's partially true — but it's also a smart move to make YouTube Shorts look more competitive. Short-form is a battleground. TikTok remains dominant in culture and viewership. Reels is Instagram's answer. Shorts, while growing, has always had a comparative optics problem — creators would often post the same video across platforms and notice YouTube's view count lagging. The new metric closes that gap — but without fundamentally improving performance or audience quality. In other words: it's a perception shift, not a product shift. This change also simplifies storytelling for creators when pitching brands. It's easier to say 'this Short got 100k views' than explain 'it had 40k meaningful views, 100k impressions.' That has real implications for brand deals and CPM negotiations — but risks creating a new layer of noise and vanity metrics in the creator economy. Engaged views. Watch time. Audience retention. These are the real indicators of whether content is working. For brands looking to partner with creators, the key is to go beyond headline view counts. The real value comes from creators who can consistently engage and influence — not just stop a thumb-scroll for half a second. For creators, this change means your view counts might spike — but your real task remains unchanged: make content that holds attention. Metrics like average watch duration and click-through rate on YouTube remain far more valuable for understanding your impact and potential earnings.
