We came across a bullish thesis on QuantumScape Corporation (QS) on Value Investing Subreddit Page by beerion. In this article, we will summarize the bulls’ thesis on QS. QuantumScape Corporation (QS)'s share was trading at $3.8 as of April 21^st.

A close up image of a technician changing a battery cell in a lithium-based battery.

QuantumScape is a next-generation battery company focused on solving the trade-offs inherent in current lithium-ion technology. Traditional batteries force compromises—between fast charging, safety, cost, and energy density—whereas QuantumScape aims to achieve breakthroughs across all metrics simultaneously through its solid-state battery design. The company's "anode-free" architecture eliminates costly and complex components, notably the graphite or silicon anodes used in legacy batteries. This design reduces production steps and material costs, potentially delivering up to 17% cost savings once scaled. While still in the pre-commercial stage, QuantumScape has moved beyond lab validation and is progressing toward commercial-scale manufacturing, albeit with considerable distance still to cover before achieving gigafactory-level output. This positions the stock as a high-risk, high-reward opportunity.

Valuation hinges on three scenarios. In the bull case, QuantumScape emerges as a dominant player, scaling to 1,500 GWh of capacity by 2045 and earning $13 per kWh—yielding massive upside. In the base case, QuantumScape still succeeds but faces strong competition, leading to more modest adoption at 500 GWh and $6 per kWh. The bear case assumes commercial failure, but recognizes residual value in the company’s IP and $3 billion of R&D spent to date. When assigning probabilities to each scenario, the current market price around $3.70 implies that QuantumScape is priced for failure, assuming a sub-20% chance of success while its competition is given over 70% odds. This disconnect, in the eyes of the author, makes the stock a deeply asymmetric investment. If one simply assumes even odds of success between QuantumScape and competitors, the stock could be worth approximately $28. Ultimately, QuantumScape is not without substantial execution risk, but its revolutionary potential in battery technology presents a uniquely mispriced opportunity for investors willing to bet on innovation.

QuantumScape Corporation (QS) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 22 hedge fund portfolios held QS at the end of the fourth quarter which was 22 in the previous quarter. While we acknowledge the risk and potential of QS as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than QS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.