Shares of QuantumScape Corp. (QS) tumbled 5.30% in pre-market trading on Thursday, continuing the downward trend that began in after-hours trading on Wednesday. The plunge comes despite the solid-state battery technology developer reporting better-than-expected second-quarter earnings and announcing an expanded collaboration with Volkswagen's battery maker PowerCo.

QuantumScape posted a loss of $0.20 per share for Q2, narrower than the $0.25 loss reported in the same quarter last year and slightly better than analysts' expectations of a $0.21 loss. The company also announced an amended agreement with PowerCo SE, a subsidiary of Volkswagen Group, which will contribute up to $130.7 million over two years to support joint development and commercialization activities for its QSE-5 solid-state lithium metal battery technology.

However, the positive news was overshadowed by QuantumScape's narrowed full-year guidance for adjusted EBITDA loss to a range of $250 million to $270 million, which may have disappointed some investors hoping for more significant improvements. Additionally, the sharp decline appears to be driven by profit-taking following the stock's recent surge, which saw it more than double in value over the past month. This recent rally was partly fueled by speculation and increased retail investor interest, reminiscent of the meme stock phenomenon seen in previous years. As QuantumScape continues to develop its innovative battery technology, investors and analysts will be closely watching for further progress in commercialization efforts and strategic partnerships.