QuantumScape (QS 3.62%) stock got hit with a massive pullback over the last week of trading. The company's share price ended this Friday's session down 31% from the previous week's market close.
QuantumScape started this week's trading with strong bearish momentum connected to new analyst coverage from Goldman Sachs. The company's share price saw another big negative catalyst at the end of the week after new macroeconomic developments prompted big valuation pullbacks for speculative growth stocks.
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QuantumScape stock sank in response to negative analyst coverage
Last Sunday, Goldman Sachs published new coverage on QuantumScape and reiterated a sell rating on the stock. While Goldman's lead analyst on the stock raised the investment firm's one-year price target from $2 per share to $3 per share, the new valuation target was still strongly bearish.
Even after a big sell-off this week, Goldman's updated target suggests potential downside of roughly 64% for the stock. The negative coverage on QuantumScape kicked off strong selling pressures early in the week, and shares took another step back on Friday in response to developments suggesting a less favorable macroeconomic outlook.
Will macroeconomic developments keep pressuring QuantumScape?
QuantumScape and other growth stocks saw significant pullbacks Friday in response to a worse-than-expected July jobs report and the announcement of new tariffs from President Donald Trump. The Federal Reserve announced earlier in the week that it was not lowering the benchmark interest rate, and the combination of unfavorable macroeconomic news prompted a big sell-off for stocks at the end of the week.
While QuantumScape has recently scored wins with new manufacturing processes and an expanded contract with Volkswagen's PowerCo subsidiary, it remains a highly speculative stock with an uncertain outlook. If macroeconomic conditions broadly shift in less favorable directions, QuantumScape stock could be at risk of significant downside volatility in the near term.
