Investor sentiment towards Velo3D, Inc.’s (
VELO) business has surged in recent months, driven by expectations of a growth acceleration and a transition to profitability. Much of this optimism stems from Velo3D’s high-profile customers, like SpaceX. Velo3D’s shift towards
a service model (Rapid Production Solutions) is also expected to create stronger growth and margins. I tend to think that this is the better way of monetizing additive manufacturing technology, particularly when targeting high-value use cases, as Velo3D will be able to capture more of the value that it creates. The service model should also appeal to customers who are reluctant to make a significant investment in hardware. Guidance is dependent on this transition working, though, and Velo3D will need to make substantial capital investments in the coming years.
