How Quantum Computing stock (QUBT) jumped 300%

The stock price of Quantum Computing Inc. (NASDAQ: QUBT) surged 300% over the past month despite a significant 40% drop on December 19. This volatility highlights the speculative nature of quantum computing stocks, driven by recent advancements and government funding. QUBT specializes in affordable quantum computers that operate at room temperature, focusing on high-performance computing, cybersecurity, imaging, and sensing.

Recent developments in quantum technology, notably from industry players such as Google and Amazon, have reignited interest in this sector. Google’s announcement of its Willow chip, which reduces errors in quantum computing, and Amazon’s Quantum Embark initiative have contributed to a broader rally in quantum stocks. Enhanced funding, including $2.7 billion from the U.S. government for quantum computing, has further buoyed sentiment across the market.

Quantum Computing Inc. is currently in a developmental stage, with a revenue base of just $386,000 reported last year and operating losses reaching $25 million. The company’s product lineup includes the Dirac-3 quantum computer and EmuCore reservoir computing, among others. Despite these challenges, QUBT has shown significant gains, outpacing peers such as RGTI and QBTS, which raises investor questions about the technology’s scalability and real-world application.

The recent contract secured with NASA, wherein QCi’s Dirac-3 will assist in sophisticated imaging and data processing, has fueled further optimism among investors. This contract reflects an increasing recognition of quantum computing’s potential across various sectors, including automotive and pharmaceuticals, where quantum technologies could enhance capabilities and transform industries.

How D-Wave Quantum pulled off a 500% stock jump

However, the path to practical implementation remains fraught with hurdles. Quantum computers rely on qubits, which can exist in multiple states, allowing complex calculations that exceed the capabilities of classical computing. Yet, a surge in the number of qubits typically incurs an equally significant increase in errors, presenting a fundamental challenge within the field. According to a McKinsey report, 72% of tech executives foresee the development of fully fault-tolerant quantum computers by 2035, while others anticipate a longer timeline extending to 2040 or beyond.

Investment firms have also revised their price targets for various quantum computing companies, including IonQ, D-Wave Quantum, and Rigetti Computing. IonQ’s shares have risen 206% year-over-year, D-Wave surged 582.4%, and Rigetti has seen an astonishing increase of 789%. DA Davidson highlighted IonQ as a compelling investment driving growth in quantum computing, emphasizing reliable trapped-ion qubit architecture that promises improved scalability and performance.

Benchmark recently raised D-Wave’s price target from $3 to $8, citing a stronger outlook following discussions with their CFO. Craig-Hallum initiated coverage of Rigetti with a buy rating and a $12 price target, underlining the unique scaling advantages the company possesses compared to its peers.

While recent fluctuations in QUBT reflect the broader volatility of quantum computing stocks, industry advancements are laying groundwork for future growth. Investors are now faced with a decision: whether to enter at a lower price point following recent declines or to bet on the technology’s promise amid its current developmental state.

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Featured image credit: Quantum Computing Inc.