Today, June 29, 2026, marks a pivotal moment for Velo3D, Inc. (NASDAQ: VELO), the metal additive manufacturing specialist. The company announced its inclusion in the broad-market Russell 3000® Index and the Russell Microcap® Index, a development that immediately sent its shares soaring. Trading at $18.40, Velo3D's stock climbed over 10% on the news, reflecting the market's positive reaction to enhanced institutional exposure. This inclusion, part of the first 2026 Russell indexes reconstitution, means automatic entry into either the Russell 1000® or Russell 2000® indexes, significantly broadening Velo3D's reach within the investment community.
The Russell indexes are widely adopted benchmarks, with approximately $12.2 trillion in assets tracking them as of May 2026. For a company with a market capitalization of $356.9 million, this move from microcap obscurity to broader index membership is a game-changer. It promises increased liquidity and visibility, drawing in passive funds and active managers who benchmark against these indexes. Arun Jeldi, CEO of Velo3D, underscored the significance, stating, "Being added to the Russell 3000 and Russell Microcap indexes is an important milestone for Velo3D. We have made meaningful strides in transforming the company, advancing our technology leadership, and creating value for shareholders." This newfound exposure arrives as Velo3D navigates a critical phase of its financial turnaround, aiming for profitability in the latter half of the year.
Velo3D's financial performance in the first quarter of 2026, reported on May 12, 2026, paints a picture of a company in transition. While still operating at a loss, the growth trajectory is notable. The company posted revenue of $13.8 million, a substantial 48% increase year-over-year from $9.32 million in Q1 2025. This growth was primarily driven by its 3D printer and parts segment, which generated $12.02 million. Despite this revenue expansion, Velo3D recorded a net loss of (0.28) per share, though this was a significant improvement from the $(25.014) million loss in the prior-year quarter.
The company's gross margin also saw a positive shift, reaching 17.2% in Q1 2026, a marked improvement from 7.5% in Q1 2025 and a negative 73.6% in Q4 2025. This indicates a healthier cost structure emerging from its operations. Cash and cash equivalents stood at $16.6 million as of March 31, 2026, down from $39.0 million at the end of 2025. However, a crucial capital injection occurred on April 27, 2026, when Velo3D closed a registered direct offering, raising approximately $50 million in gross proceeds. This, combined with debt-to-equity conversions, reduced outstanding debt by 70% to approximately $9 million, significantly strengthening the balance sheet.
Management has reaffirmed its full-year 2026 guidance, projecting revenue between $60 million and $70 million. More importantly, the company anticipates sequential improvement in gross margin, targeting greater than 30% in the second half of 2026, and expects to turn EBITDA positive in the same period. This guidance, if met, would represent a significant inflection point for Velo3D, moving it towards sustainable profitability.
| Metric (in $ millions, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | 13.8 | 9.3 |
| Gross Profit | 2.4 | 0.7 |
| Gross Margin | 17.2% | 7.5% |
| Total Operating Expenses | 9.3 | 12.2 |
| Net Loss | (7.0) | (25.0) |
| EPS | (0.28) | (1.87) |
| Cash & Equivalents (as of March 31) | 16.6 | N/A |
Velo3D's core differentiator lies in its proprietary "support-less" metal additive manufacturing technology. Unlike conventional laser powder bed fusion, which requires extensive support structures for parts with angles less than 45 degrees, Velo3D's Intelligent Fusion® manufacturing process allows engineers to design and print complex geometries without internal supports. This capability is critical for industries like aerospace, defense, and space exploration, where parts often feature intricate internal passageways, inlets, and manifold-like structures.
The elimination of support structures offers several profound benefits. Michael Corliss, VP Technology for Knust–Godwin, a user of Velo3D's technology, highlighted the impact on consistency, stating, "Using support-free building reduces the human element so it increases our reproducibility. The support removal is such a manual process and it is very, very hard to control." This reduction in manual post-processing steps not only lowers costs and lead times but also significantly improves part quality and reduces scrap rates. David Bentley, Senior Manufacturing Engineer for 3D printed metals at Protolabs, further clarified that the most problematic parts, "any parts with inlets, outlets, and manifold-like structures between these points of accessibility," are precisely where Velo3D's technology shines.
The integrated solution, comprising Flow™ print preparation software, the Sapphire® family of printers, and the Assure® quality control system, enables the production of mission-critical metal parts for space rockets, jet engines, and fuel delivery systems that were previously impossible to manufacture. This technological edge is a key driver behind Velo3D's strategic positioning in high-value, high-performance applications.
Velo3D's growth strategy is heavily reliant on forging strategic partnerships and expanding its footprint in key industrial sectors. The company has cultivated a network of innovators and original equipment manufacturers (OEMs) who leverage its advanced metal AM solutions. Notable strategic partners include SpaceX, Honeywell, Honda, and Chromalloy, indicating strong validation of its technology in demanding environments.
Recent collaborations further underscore this strategy. In June 2025, Velo3D announced a $4 million, two-year Master Services Agreement with Vaya Space, a hybrid rocket company, to advance additive manufacturing for space propulsion. This partnership focuses on producing high-quality engine components like nozzles, injectors, and turbopumps faster and at a lower cost. Just this month, on June 9, 2026, Velo3D also announced a strategic partnership with Aurelia Technologies, a developer of small-scale gas turbines, to advance AM in next-generation turbine systems. This collaboration aims to improve performance, reduce lead times, and strengthen supply chain resilience for critical turbine components.
Beyond aerospace and defense, Velo3D is also making inroads into the semiconductor industry through a joint development agreement with Lam Research Corporation. This partnership focuses on developing new materials and metal additive manufacturing applications for semiconductor equipment, a sector known for its stringent demands on precision and repeatability. These alliances, combined with the broader metal additive manufacturing market projected to grow from $7.02 billion in 2026 to $13.11 billion by 2030 at a 16.9% CAGR, provide a robust tailwind for Velo3D's expansion. North America, where Velo3D is based, is expected to account for a significant portion of this growth, with a 43.7% share during the forecast period.
Despite the promising technology and strategic partnerships, Velo3D faces significant challenges that warrant a cautious outlook. The company's current financial state, characterized by negative margins and ongoing losses, presents an execution risk. While management has guided towards positive EBITDA in the second half of 2026, achieving this hinges on consistent revenue growth, successful cost management, and the ability to scale production efficiently. Any delays in customer orders, particularly from large defense or space programs, or disruptions in government funding, could derail these projections and impact the timing of profitability.
Furthermore, Velo3D's valuation, particularly its price-to-sales (P/S) ratio of 7.07, appears stretched for a company that is not yet profitable. While high-growth technology companies often command premium multiples, Velo3D's negative gross and operating margins (TTM gross margin of -11.3% and operating margin of -99.0%) suggest that the market is pricing in substantial future growth and a successful turnaround. If the company fails to meet its aggressive financial targets, or if the ramp-up in gross margins and EBITDA positivity is slower than anticipated, the stock could face significant downward pressure.
The competitive landscape in metal additive manufacturing is also intensifying, with various players offering different technologies. While Velo3D's support-less approach is a differentiator, the overall market is still relatively nascent for high-volume production, and adoption rates in some industrial applications may be slower than expected. The company's reliance on a relatively small number of large, mission-critical contracts also introduces concentration risk. Any loss of a major customer or a slowdown in their procurement cycles could have a disproportionate impact on Velo3D's revenue.
Wall Street analysts maintain a constructive view on Velo3D, with a consensus rating of Buy. This sentiment is based on the company's technological leadership, its strategic positioning in high-growth sectors, and the anticipated financial turnaround. The median analyst price target for VELO stands at $29.00, implying a substantial upside of approximately 57.6% from the current price of $18.40. The highest target reaches $33.00, while the lowest is $25.00, indicating a relatively tight range of bullish expectations.
Lake Street, the sole analyst firm providing recent ratings, has maintained its Buy rating on Velo3D, with the latest affirmation on May 13, 2026, following a similar stance on December 29, 2025. This consistent positive outlook suggests confidence in the company's long-term potential, particularly its ability to execute on its guidance for positive EBITDA and improved gross margins in the latter half of 2026. Analysts are likely factoring in the broader market opportunity in metal additive manufacturing, especially its increasing industrialization in aerospace and defense, as well as the benefits of Velo3D's unique technology in enabling complex, mission-critical parts. The recent Russell index inclusion is expected to further bolster institutional interest, potentially leading to broader analyst coverage and increased investor confidence.
Velo3D's inclusion in the Russell 3000 Index today, June 29, 2026, is a significant milestone that provides much-needed institutional visibility to a company at a critical juncture. While its current financials reflect a challenging journey towards profitability, the underlying technology, strategic partnerships, and a rapidly expanding metal additive manufacturing market present a compelling long-term growth story. The market's immediate positive reaction, with shares up over 10%, underscores the importance of this index inclusion as a catalyst.
For investors with a high-risk tolerance and a long-term horizon, Velo3D represents a speculative but potentially rewarding opportunity in the industrial transformation space. The company's unique support-less printing technology addresses a crucial pain point in manufacturing complex metal parts for aerospace, defense, and semiconductors, sectors poised for substantial growth. Management's clear guidance towards positive EBITDA and improved gross margins in the second half of 2026 provides a tangible path to financial health.
Given the current price of $18.40 and the median analyst target of $29.00, we see a significant upside. An entry zone for Velo3D could be considered between $17.00 and $19.00, allowing for some consolidation after the index-inclusion rally. Our 12-month target price is $29.00, aligning with the analyst consensus and reflecting the successful execution of its turnaround plan and continued market penetration. An invalidation level would be a sustained close below $14.00, which would signal a breakdown in the current bullish momentum and raise concerns about the company's ability to achieve its financial targets. Velo3D is a high-stakes bet on the future of industrial manufacturing, but one with a clear path to significant rewards if it executes.
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