Rigetti Computing (RGTI) shares soared more than 15% at one point in Thursday trading following reports President Donald Trump’s administration wants to take equity stakes in the quantum technology companies. However, investors should note that the Trump admin has since said it is not negotiating equity stakes with any quantum-tech companies. Despite a sharp increase on Thursday, RGTI stock remains down over 30% versus its recent high. More News from Barchart www.barchart.com Is Government Interest Bul ...

Market Overview - U.S. equities showed signs of recovery on October 23, 2025, with major indexes bouncing back from a volatile session the previous day, driven by corporate earnings, U.S.-China trade relations, and a surge in oil prices [1][2] - The Dow Jones Industrial Average (DJIA) rose by approximately 0.1% or 25 points, while the S&P 500 (SPX) advanced by about 0.3%, and the Nasdaq Composite (IXIC) led gains with a rise of around 0.6% [2] Sector Performance - The Energy Select Sector SPDR (XLE) surged by 1.62%, significantly contributing to market gains, fueled by a nearly 6% increase in West Texas Intermediate crude oil futures, which reached $61.90 per barrel due to new U.S. sanctions on Russian oil companies [3] - The Technology Select Sector SPDR (XLK) experienced a slight decline of 0.34%, while Consumer Discretionary (XLY) and Health Care (XLV) sectors also finished lower [3] Upcoming Events - Investors are awaiting the Consumer Price Index (CPI) report scheduled for October 24, which is expected to provide insights into inflation trends and influence Federal Reserve policy decisions, with a 96.7% probability of a Fed rate cut in October [4] Corporate Earnings - Major companies are set to report quarterly results, including Apple (AAPL) on October 30, Microsoft (MSFT) on October 29, and Alphabet (GOOGL, GOOG) also on October 29, with expectations of strong revenue growth [5] - Intel (INTC), Ford (F), Honeywell (HON), T-Mobile US (TMUS), and American Airlines (AAL) are also expected to release their results [5] Geopolitical Factors - The White House is considering new curbs on software exports to China, which previously affected tech stocks, indicating ongoing geopolitical tensions that could lead to market volatility [6] Major Stock News - Tesla (TSLA) reported a 12% revenue increase but a 37% narrowing of net income for Q3 2025, leading to initial stock declines despite record vehicle deliveries of 497,099 units [7] - Google (GOOGL, GOOG) announced a corporate agreement for a gas-fired power plant with carbon capture technology and a significant quantum computing breakthrough, with shares climbing 0.82% [9] - Nvidia (NVDA) continued strong momentum with shares near all-time highs, driven by major AI partnerships and a $5 billion investment in Intel for a 4% stake [10] - Apple (AAPL) faced a legal setback in the UK regarding its App Store commission, but remains financially robust ahead of its earnings release [11] - Microsoft (MSFT) is expected to exceed revenue expectations, driven by strong growth in its Azure cloud business [12] - IBM (IBM) saw its stock drop despite better-than-expected profit and revenue, indicating challenges in its enterprise business [13]

Core Insights - The Trump administration is reportedly considering taking equity stakes in quantum computing firms in exchange for federal funding, which has led to significant market movements in related stocks [1][2][6] - Companies such as IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing have seen their shares rise between 5% and 14% following these reports [2][6] - The administration's approach reflects a broader trend of government involvement in key industries, with previous investments in sectors like chipmaking and rare earths [5][7] Industry Impact - Quantum computing is viewed as a critical industry for future technological advancements, contributing to heightened volatility and price fluctuations in related stocks even before the recent news [4][6] - The Defiance Quantum ETF, which includes around 80 stocks in the quantum computing sector, also experienced a 2% increase [2] Government Involvement - The Trump administration's strategy of investing in publicly traded companies has been characterized as "state capitalism," with a focus on sectors deemed vital for national interests [1][5] - While some market observers support this approach as necessary for direct involvement in essential industries, others express concerns about the implications of government picking winners and losers [7][8]

Core Insights - The Trump administration is accelerating its investment in quantum computing by negotiating equity stakes in leading firms such as IonQ, Rigetti, and D-Wave Quantum [1][2] - Each participating company is expected to receive at least $10 million in federal funding in exchange for a portion of their equity [2] - The initiative aligns with the administration's broader strategy to invest in critical industries, following previous investments in companies like Intel and MP Materials [2] Company and Industry Summary - The oversight of the quantum computing program is led by Deputy Commerce Secretary Paul Dabbar, a former executive in the quantum field, while Deputy Secretary of Defense Steve Feinberg has connections to Cerberus Capital Management [3] - Cerberus Capital Management holds a $100 million position in IonQ, linking a politically connected private equity firm to the quantum investment agenda [4] - Quantum stocks experienced significant gains, with IonQ, Rigetti, and D-Wave rising between 13% and 20%, and Quantum Computing, Inc. increasing by 10% [6]

Core Viewpoint - The Trump administration is negotiating with several U.S. quantum computing companies to replicate the investment model used with Intel, seeking equity in exchange for federal funding support [1][4]. Group 1: Government Involvement - Companies involved in discussions include IonQ, Rigetti Computing, D-Wave Quantum, Quantum Computing, and Atom Computing, with some seeking a minimum funding amount of $10 million [4]. - The U.S. government previously invested $8.9 billion in Intel, acquiring 9.9% of its shares, making it one of Intel's largest shareholders [4]. - The U.S. Department of Defense agreed to purchase $400 million in preferred stock from MP Materials, becoming its largest shareholder, which led to a 50% increase in the company's stock price [4]. Group 2: Market Reaction - Following the news, shares of several quantum computing companies surged, with IonQ up over 11%, D-Wave up over 20%, Rigetti up over 13%, and Quantum up over 10% [5]. - Specific stock price changes include D-Wave Quantum at $32.879 (+20.48%), Rigetti Computing at $40.910 (+13.45%), and IonQ at $61.725 (+11.32%) [6]. Group 3: Quantum Computing Landscape - Quantum computing is viewed as a critical next-generation technology capable of performing calculations that would take traditional computers billions of years [8]. - Despite the promising outlook, no company has yet achieved practical, large-scale commercial quantum computing [8]. - Microsoft announced a breakthrough in quantum computing with the creation of the world's first "topological conductor," which is theorized to be highly resistant to interference [8]. - PsiQuantum completed a $1 billion Series E funding round to build the world's first commercially viable fault-tolerant quantum computer [8]. Group 4: Industry Perspectives - NVIDIA CEO Jensen Huang previously expressed skepticism about the timeline for practical quantum computers, stating they may take decades to develop, but later reversed his stance, acknowledging the potential of quantum computing [9].

Group 1 - Quantum computing stocks surged on Thursday, with D-Wave Quantum rising nearly 22%, Rigetti Computing up over 15%, IonQ Inc increasing by nearly 12%, and Quantum Computing up 11% [1] - Several quantum computing companies are negotiating to transfer equity to the U.S. Department of Commerce in exchange for federal funding support, indicating an expansion of government intervention in key economic sectors [1] - Companies including IonQ, Rigetti Computing, and D-Wave Quantum are discussing making the U.S. government a shareholder in return for a minimum funding of $10 million per company, with other tech firms expected to join this funding competition [1]

Core Viewpoint - Quantum computing stocks surged in the US market, indicating strong investor interest and potential government support for the sector [1] Group 1: Stock Performance - D-Wave Quantum (QBTS.US) rose nearly 22% - Rigetti Computing (RGTI.US) increased over 15% - IonQ Inc (IONQ.US) gained nearly 12% - Quantum Computing (QUBT.US) climbed 11% [1] Group 2: Government Involvement - Several quantum computing companies are negotiating to transfer equity to the US Department of Commerce in exchange for federal funding support [1] - Companies like IonQ, Rigetti Computing, and D-Wave Quantum are in discussions to make the US government a shareholder for access to specialized funding [1] - Other firms, including Quantum Computing Inc and Atom Computing, are also considering similar arrangements [1] Group 3: Funding Details - The companies are seeking a minimum funding amount of $10 million from the government for each enterprise [1] - Other technology companies are expected to join the competition for these funds [1]

Group 1 - The Trump administration has taken ownership stakes in five publicly-traded companies, including Intel (10%), MP Materials (15%), Lithium America (10%), Trilogy Metals (10%), and U.S. Steel Corp. (golden share partnership) [1] - At least five quantum computing funds are in discussions for federal funding in exchange for equity stakes, with companies like IonQ, Rigetti Computing, and D-Wave Quantum being potential targets [2] - The U.S. government's direct equity investment in private critical mineral companies signifies a shift in industrial policy, moving away from traditional methods like grants and loans [4] Group 2 - The motivation behind the government's equity stakes is to accelerate domestic mineral production, reduce reliance on China, and rebuild critical supply chains [5] - Lockheed Martin is identified as a potential candidate for government equity investment due to its alignment with national interests and reliance on federal budgets [6]

Core Viewpoint - The market behavior in the quantum computing sector is characterized by a significant divergence between legacy company IBM and its pure-play rivals, with IBM's stock declining despite having advanced quantum products, while other companies in the sector are experiencing substantial gains [1][2][3]. Company Performance - IBM's stock fell by 6.54% in premarket trading, despite being recognized for having the "most advanced quantum product" [2][3]. - In contrast, stocks of IonQ Inc. increased by 9.74%, Rigetti Computing Inc. rose by 7.52%, and D-Wave Quantum Inc. surged by 10.77% following reports of potential equity stakes from the Trump administration [3]. Valuation Metrics - Rigetti Computing has an extraordinarily high Price-to-Sales (P/S) ratio of 1,136, while IonQ and D-Wave have P/S ratios of 241 and 313, respectively [5][7]. - IBM, despite its advanced product, has a much lower P/S ratio of 4.159, highlighting a disconnect between its fundamentals and the market's speculative behavior [6][7]. Market Sentiment - The recent rally in quantum stocks is attributed to retail investors, with indications that the momentum may be overheating, as suggested by The Arora Report [4][5]. - The report describes these quantum stocks as "poster children of several excesses," indicating that they are trading significantly above their intrinsic values [5].

Core Insights - The U.S. government is exploring diversification of its investment portfolio, particularly in quantum computing, with discussions ongoing with at least five funds for potential equity stakes in exchange for federal funding [1][2] - The government has previously made significant investments, including a 10% stake in Intel and a 15% stake in a major rare earths miner [1] - The initial investment discussions with quantum computing companies are expected to start at $10 million, which is considerably lower than the $9 billion in grants converted to equity for Intel [2] Company Developments - Companies such as IonQ, Rigetti Computing, and D-Wave Quantum are in talks to add the government as a shareholder, with Quantum Computing Inc. and Atom Computing also considering similar arrangements [2] - Shares of IonQ and D-Wave saw a 9% increase in pre-market trading, while Rigetti and Quantum Computing stocks rose by 7% and 11% respectively, indicating positive market sentiment towards these companies [3] Industry Outlook - Quantum computing is viewed as a transformative technology, comparable to artificial intelligence, with the potential to perform complex simulations much faster than current computers [3] - Bank of America has expressed a highly optimistic view on quantum computing, suggesting it could be the most significant revolution since the discovery of fire, although practical applications are still years away [4] - Despite the enthusiasm, experts indicate that it may take until the end of the decade for useful quantum computers to be developed, with commercial breakthroughs potentially another decade away [4] Government Investment Strategy - No investment deals have been finalized with the current administration, and specific terms for potential investments remain undefined [5] - By acquiring equity stakes, the government could gain more control over the rollout of quantum technology and benefit financially if the stock prices of these companies increase [5]