Today, the electric vehicle (EV) sector is red hot. Many of the biggest names in this category are seeing impressive price moves. From Rivian (NASDAQ:RIVN) to Fisker (NYSE:FSR) and QuantumScape (NYSE:QS), there appears to be tremendous interest in these hyper-growth names. Currently, QS stock is up around 13% at the time of writing, above Fisker but trailing Rivian which are seeing gains of about 10% and 20%, respectively.
For early-stage companies in the EV and battery space with little-to-no revenue, valuations can be hard to define. However, when one stock rises in this peer group, the entire group tends to move in lockstep. Today appears to be one instance of this thesis holding true, with demand for RIVN shares boosting valuations across the space.
Investors looking at buying into any of these stocks at such levels ought to consider what’s driving the sector higher. Let’s discuss a few of the key catalysts people are watching right now.
EV Sector Enthusiasm Is Boosting QS Stock
As a battery company, QuantumScape has a lot to gain from the direction that the EV sector is headed. Indeed, this is a firm that’s reliant on the EV growth thesis holding up. And for now, it appears the electric vehicle industry shows no signs of slowing.
Specifically, QS is betting big on the demand for solid-state batteries. We found out earlier this week the company is expanding its San Jose campus — and it wasn’t a small expansion, mind you. The company is adding a number of new buildings and offices set to house “hundreds of new employees.” That sure sounds like a bullish stance to me.
Additionally, as fellow InvestorPlace contributor Mark Hake points out in a recent piece, new customers may be on the horizon for QuantumScape. In a shareholder letter on Oct. 27, the company announced that a new original equipment manufacturer (OEM) may be interested in its batteries.
That’s great news for investors. Adoption will likely be key for QuantumScape. So, lining up companies to create demand out of the gate is an important step toward commercialization.
Currently, QS stock remains a speculative bet. No doubt, this firm has a long way to go in order to commercialize its product. However, there’s certainly hope that QuantumScape could be the innovator that long-term growth investors want. As such, the company is definitely on my radar right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.