Jim Cramer Explains Why Velo3D (VELO) Is Only Worth a Quarter Position Right Now

During the lightning round of the September 1 episode of Mad Money, a caller highlighted Velo3D, Inc.'s (NASDAQ:VELO) 52% year-over-year revenue surge, raised guidance, and projected second-half positive EBITDA along with deep ties to SpaceX and defense primes and asked whether it was finally time to buy. Jim Cramer commented:

Okay, they have not had the revenue growth that I thought they should have and that's why I think it's at $11. I think you got to wait for a few more solid quarters because it has not been the right place to be. You can buy about a quarter position because it is a good spec, but I don't want you to get bigger than that until we find out why the revenues aren't growing more.

Velo3D, Inc. (NASDAQ:VELO) stands out because it builds high-end metal 3D printers that make extremely complex parts for rockets, satellites, and defense equipment. When aerospace giants like SpaceX need lightweight engine components that traditional factories simply cannot manufacture, they turn to Velo3D's systems. By figuring out how to print these tricky metal parts without needing the usual support structures, the company has secured a real spot in industries where precision is absolutely necessary and there is zero room for error.

Nevertheless, having great technology does not automatically make a stock a winner. Selling million-dollar hardware takes time, and investors are waiting to see if the company can reliably turn those impressive contracts into steady cash flow. When a hardware stock is this speculative and sales are choppy, it serves as a good reminder that exciting tech needs a few solid quarters of real financial proof before investors can trust the growth story.

Looking at what the professionals are doing, it is easy to see why caution is warranted. According to Insider Monkey's database of over 1,000 elite hedge funds, just 14 held a position in Velo3D, Inc. (NASDAQ:VELO) during the second quarter, a tiny bump from 12 in the prior quarter. More importantly, short interest sits at a massive 30.43% of the float. That means a large chunk of the market is actively betting against the stock, which shows deep skepticism around the company's ability to execute on its promises.

Taking into account the specialized tech, uneven execution, and the heavy short pressure, the stock sits in a speculative territory. Cramer's suggestion to limit any buy to a quarter-sized position shows a balanced view, which gives curious investors a small entry point while leaving the door open to see if upcoming quarterly reports can actually back up the commercial narrative.

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