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Why QUBT Stock May Not Be a Buy Now Despite Quantum Boom
Quantum puting Quantum puting (US:QUBT) ZACKSยท2025-10-21 20:01

Core Insights - Quantum Computing Inc. (QUBT) has made significant advancements in scaling its quantum and photonic technology platforms while enhancing its financial position and commercial reach through 2025 [1] - The company has secured key contracts with NASA, NIST, and Delft University, and has shipped its first commercial entangled photon source to South Korea [2] - Multiple capital raises, including a $200 million financing in June and oversubscribed offerings totaling over $1 billion by October, have strengthened QUBT's balance sheet [3] Financial Performance - Year-to-date, QUBT's stock has underperformed the industry, sector, and S&P 500, with a growth of only 4.4% [6] - The company's second-quarter 2025 results showed minimal revenues of $61,000 and a widening net loss of $36 million, indicating execution risks [6][9] - Estimates for QUBT's third-quarter loss have narrowed from 6 cents to 5 cents per share, but estimates for the full year have widened from a loss of 17 cents to 25 cents [14] Market Position and Growth Potential - QUBT's long-term growth is driven by its quantum systems and thin-film lithium niobate (TFLN) photonic chip foundry, with products like the Quantum Photonic Vibrometer and EmuCore reservoir computing platform being shipped to various clients [10] - The Tempe, AZ foundry is expected to generate meaningful revenues within 12-18 months, supported by partnerships with NASA and NIST [11] - QUBT is currently trading 43.6% below its average Zacks price target, indicating potential for near-term upside [12] Challenges and Risks - Despite technological advancements, QUBT faces near-term challenges including rising operating expenses, heavy investment needs, and dependence on future customer adoption [6][9] - Global trade frictions and tightening export controls on advanced semiconductors and quantum technologies present additional headwinds for the quantum and photonics ecosystem [7] - Supply chain disruptions and geopolitical uncertainties could impact access to critical materials, slow down production ramp-up, and increase costs [7]