Why Are Velo3D Shares Falling On Thursday?

Velo3D Inc (NASDAQ:VELO) shares are trading lower on Thursday. The retreat follows a massive rally during Wednesday’s session. Investors appear to be locking in profits after a triple-digit run-up over the past six months. The Nasdaq is up 0.97% while the S&P 500 has gained 0.96%. • Velo3D stock is feeling bearish pressure. Why is VELO stock dropping? Profit-Taking Follows 50% Surge The metal additive manufacturing specialist saw its stock skyrocket over 50% on Wednesday. This move came after a strong first-quarter 2026 earnings report. As of Thursday, the stock is seeing a natural cooling period. Market data shows the share price surged 316.74% over the last half-year. Q1 Earnings Top Wall Street Estimates Velo3D reported a first-quarter loss of 20 cents per share. This significantly beat analyst estimates of a 48-cent loss. Revenue reached $13.82 million, up 48% year-over-year. This figure easily cleared the Street's expectation of $9.85 million. Management attributed the growth to higher system shipments and strong demand in aerospace and defense. Management maintained its 2026 revenue guidance of $60 million to $70 million. Short Interest Amplifies Volatility High short interest likely acted as a catalyst for Wednesday's jump. Short interest exceeded 25% of the float. This created significant buying pressure as short sellers covered positions. The stock hit $21.38 during the peak of the rally. Defense Contracts Anchor Future Outlook The company's backlog rose to $30 million, up from $18 million last year. Velo3D recently secured an $11.5 million contract with a U.S. defense prime. It also signed a $9.8 million deal with the Defense Logistics Agency. Critical Price Levels To Watch For Velo3D From a trend perspective, VELO is still extended to the upside: it's trading 39.6% above its 20-day SMA of $14.11 and 54.9% above its 50-day SMA of $12.72, with price also well above the 200-day SMA of $9.65. RSI is the cleaner momentum lens right now, sitting at 70.98. The longer-term structure still leans bullish: the 20-day SMA is above the 50-day SMA. Key Resistance: $23.84 Key Support: $14.11 VELO Stock Price Activity: Velo3D shares were down 7.04% at $19.53 at the time of publication on Thursday, according to Benzinga Pro data. Read Also: What Is A 'C-Shaped' Economy? Wall Street's New Buzzword Explained Photo by Michael Vi via Shutterstock