Core Insights - The focus of the latest wave of artificial intelligence is shifting from chip and semiconductor companies to the processing power and emerging technologies generated by AI, particularly quantum computing [1] - Amazon's acquisition of a $36.7 million equity stake in IonQ indicates a significant interest in quantum computing and its integration with cloud computing services [4][5] - Institutional interest in IonQ has increased, with a 34.9% boost in holdings from the Bank of New York Mellon, reflecting confidence in the company's future potential [8] Company Overview - IonQ's stock is currently trading at $41.06, with a 52-week range between $6.54 and $54.74, and a price target set at $45.00 [2] - The stock is seen as having an upside potential, trading at only 70% of its 52-week high, suggesting a gap that could be filled in the coming months [7] Market Reactions - There has been a 4.2% decline in IonQ's short interest, indicating growing investor confidence in the company's growth prospects in quantum computing [9] - The 12-month stock price forecast for IonQ is $45.00, representing an 11.33% upside based on 11 analyst ratings, with a high forecast of $70.00 [10][12] Analyst Insights - Kevin Garrigan from Rosenblatt Securities has initiated coverage on IonQ with a Buy rating and a valuation of $70 per share, suggesting a 75% upside potential from current prices [12] - The optimism surrounding IonQ is expected to grow as more market participants recognize the strategic choice made by Amazon [13]

Core Viewpoint - D-Wave Quantum Inc. reported mixed results for Q2 2025, showing revenue growth but wider net losses, highlighting ongoing challenges in achieving sustained profitability in the quantum computing sector [1][2][5]. Financial Performance - D-Wave's revenue grew by 42% year-over-year, reaching $3.1 million, surpassing analyst expectations [6]. - Adjusted losses per share were 8 cents, wider than the anticipated 5 cents, but improved from 12 cents in Q2 2024 [5][6]. - The company has over 100 revenue-generating customers, indicating a diversified revenue base [6]. Partnerships and Use Cases - D-Wave announced significant partnerships, including a collaboration with a Fortune 500 aerospace and defense company, leading to multiple use cases for its technology [8]. - The company successfully developed a proof of technology for patrol vehicles with North Wales police, suggesting potential for further agreements with law enforcement [9]. Cash Reserves and M&A Strategy - D-Wave ended Q2 with a record $819 million in cash reserves, following a $400 million equity program, positioning the company for potential acquisition activity [10]. - The firm aims to utilize M&A to enhance product development and R&D, with plans to announce acquisition activity later this year [10][11]. Market Outlook - D-Wave's stock is currently rated a unanimous Buy by analysts, with a price target of $17.55, indicating a potential upside of approximately 1.5% [12]. - The company anticipates a strong pipeline for new sales of its Advantage2 systems, with expectations of increasing sales in the near future [12].

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Core Insights - Rigetti Computing has achieved a significant technical milestone with its 36-qubit Ankaa system, demonstrating a two-qubit gate fidelity of 99.5%, the highest fidelity recorded for its quantum systems, validating its modular architecture and fabrication improvements [1][6] - Despite these advancements, Rigetti has not yet established a clear path to meaningful revenue growth, with its financial results indicating early stages of customer adoption and product-market fit [1][2] - The company plans to launch its 36-qubit system on August 15, 2025, and aims to release a 100+ qubit chiplet-based system targeting 99.5% median two-qubit gate fidelity by the end of 2025 [2] Industry Comparisons - D-Wave Quantum has focused on annealing-based quantum systems and has built early-stage commercial relationships in optimization-heavy industries, resulting in more consistent revenue from paying customers [3] - Quantum Computing Inc. is pursuing a software-centric model with its Qatalyst platform, which remains in early commercialization stages and faces challenges in proving real-world value [4] Financial Performance - Rigetti's shares have increased by 3.6% year-to-date, while the industry has grown by 21.5% [5] - The company has a price-to-book ratio of 22.41, which is above the industry average, and carries a Value Score of F [7] - The Zacks Consensus Estimate for Rigetti's 2025 earnings suggests an 86.1% increase from the previous year [8]

Financial Data and Key Metrics Changes - Revenue for the second quarter of fiscal year 2025 totaled $3.1 million, an increase of approximately $900,000 or 42% from the 2024 revenue of $2.2 million [18] - Net loss for the second quarter was $167.3 million or $0.55 per share, an increase of $149.5 million or $0.45 per share from the 2024 net loss of $17.8 million or $0.10 per share [21] - Adjusted EBITDA loss for the second quarter was $20 million, an increase of $6.1 million or 44% from the 2024 adjusted EBITDA loss of $13.9 million [22] Business Line Data and Key Metrics Changes - Bookings for the second quarter totaled $1.3 million, an increase of approximately $600,000 or 92% from the 2024 bookings of $700,000 [19] - GAAP gross profit for the second quarter was $2 million, an increase of approximately $600,000 or 42% from the 2024 GAAP gross profit of approximately $1.4 million [21] - Non-GAAP gross profit for the second quarter was $2.2 million, an increase of approximately $600,000 or 39% from the 2024 non-GAAP gross profit of approximately $1.6 million [21] Market Data and Key Metrics Changes - The company has over 100 revenue-generating customers, including customers in the commercial, government, and research sectors, and nearly 2,000 Forbes Global 2000 companies [20] - The LaunchPad program has received more than 1,300 applications spanning business, government, and academic institutions since its introduction in January 2025 [16] Company Strategy and Development Direction - The company announced a new strategic development initiative focused on advanced cryogenic packaging to support both gate model and annealing quantum processor development [7] - The company aims to help organizations accelerate the use of annealing quantum computers in AI applications and has introduced a collection of developer tools for quantum AI and machine learning innovation [9] - The company is exploring M&A opportunities to accelerate R&D and product development activities [32][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the accelerating momentum across the business and highlighted the importance of the Advantage 2 quantum computer in achieving quantum supremacy [4][45] - The management noted that while there is a strong cash position, the timing of M&A activities is uncertain and will depend on market conditions [35] - Management emphasized the need for both annealing and gate model systems to address a full range of customer problems [13] Other Important Information - The company raised over $500 million in equity during the fiscal year, significantly improving its cash position to $819.3 million [24][25] - The company is investing in superconducting bump bond processes and upgrading its manufacturing operations to support future growth [26][27] Q&A Session Summary Question: What types of M&A does the company believe would make sense? - Management indicated that M&A is a strategic priority and will focus on accelerating R&D and product development activities [32][34] Question: Can you elaborate on the cryogenic news and its impact on the roadmap? - Management highlighted the importance of cryogenic control for scaling both annealing and gate model systems, noting faster-than-expected progress in this area [40][42] Question: What is the status of Advantage 2 and its deployment? - Management confirmed that Advantage 2 is crucial for demonstrating quantum supremacy and is driving increased customer interest [45][46] Question: Can you discuss the developer tools released? - Management explained that the new AI toolkit allows integration with PyTorch and enables the use of discrete data for machine learning, which is beneficial for quantum processes [54][56] Question: What is the retention rate for customers? - Management reported a retention rate exceeding 90% over a four-quarter period, with a focus on helping customers transition from experimentation to production applications [86]

Financial Data and Key Metrics Changes - Revenue for the second quarter of fiscal year 2025 totaled $3.1 million, an increase of approximately $900,000 or 42% from the 2024 revenue of $2.2 million [18] - GAAP gross profit for the second quarter was $2 million, an increase of approximately $600,000 or 42% from the 2024 GAAP gross profit of approximately $1.4 million [20] - Net loss for the second quarter was $167.3 million or $0.55 per share, an increase of $149.5 million or $0.45 per share from the 2024 net loss of $17.8 million or $0.10 per share [20] - Adjusted EBITDA loss for the second quarter was $20 million, an increase of $6.1 million or 44% from the 2024 adjusted EBITDA loss of $13.9 million [22] - The consolidated cash position as of June 30 was $819.3 million, representing over a 1900% increase from the fiscal 2024 second quarter consolidated cash balance of $40.9 million [24] Business Line Data and Key Metrics Changes - Bookings for the second quarter totaled $1.3 million, an increase of approximately $600,000 or 92% from the 2024 bookings of $700,000 [19] - The company signed new and renewing customer engagements with various organizations, including EON, GE Vernova, and the University of Oxford [13] Market Data and Key Metrics Changes - The company is experiencing high demand for purchasing systems, with numerous organizations globally interested in acquiring a D Wave quantum computer [9] - The LaunchPad program has received over 1,300 applications from business, government, and academic institutions since its introduction [15] Company Strategy and Development Direction - The company announced a strategic development initiative focused on advanced cryogenic packaging to support both gate model and annealing quantum processor development [5] - The company aims to accelerate its development efforts in support of its aggressive product roadmap towards 100,000 qubits [5] - The company is exploring M&A opportunities to enhance its R&D and product development activities [31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's strong cash position and its ability to explore M&A activities to propel business growth [17] - The management highlighted the importance of both annealing and gate model quantum computers in addressing a broad range of problems [12] - Management noted that while progress is being made, the government’s focus on gate model quantum computing may overlook the capabilities of annealing quantum computing [66] Other Important Information - The company is investing in superconducting bump bond processes and upgrading its manufacturing operations to support future growth [26] - The company is also expanding its professional services organization to meet growing demand for quantum optimization customer engagements [26] Q&A Session Summary Question: What types of M&A does the company believe would make sense? - Management indicated that M&A is now a strategic priority, focusing on accelerating R&D and product development activities [31] Question: Can you elaborate on the cryogenic news and its impact on the roadmap? - Management emphasized the importance of cryogenic control for scaling both annealing and gate model systems, noting faster-than-expected progress [39] Question: What is the status of Advantage Two and its deployment? - Management confirmed that Advantage Two is crucial for demonstrating quantum supremacy and is driving increased customer interest [42] Question: Can you elaborate on the developer tools released? - Management explained the introduction of a quantum AI toolkit that integrates with PyTorch, allowing for better machine learning model training [51] Question: What are the next milestones for Quantum AI? - Management stated that while no new announcements have been made, they are working on various approaches to AI and machine learning model training [56] Question: How has the tenor in the US government shifted regarding quantum annealing? - Management noted slow but steady progress in government interest, emphasizing the need for a broader focus on quantum computing approaches [66] Question: What is the customer retention rate? - Management reported a retention rate exceeding 90%, with efforts to help customers transition from experimentation to production applications [76]

Product & Technology - D-Wave announced the general availability of its Advantage2 quantum computer, featuring a more advanced quantum processor with increased connectivity, reduced noise, and greater coherence[6] - D-Wave is developing advanced cryogenic packaging, leveraging expertise from NASA JPL, aiming for a 100,000 qubit Advantage3 system[8] - D-Wave released new quantum AI/ML developer tools, including an open-source toolkit, to integrate quantum computers into modern ML architectures[11] Customer & Partnerships - D-Wave has a strong customer base and is a market leader in quantum annealing[5] - D-Wave is engaged in exciting customer engagements for both commercial and research applications, including EON, GE Vernova, Nikon Corporation, NTT Data Corp, NTT DOCOMO, Sharp Corporation, and The University of Oxford[16, 17] - D-Wave established a strategic relationship with Yonsei University and Incheon Metropolitan City to promote quantum computing in South Korea, including a potential Advantage2 system acquisition[13, 14] Financials - D-Wave completed a $400 million At-the-Market equity offering[19] - D-Wave's cash balance as of June 30, 2025, was approximately $8193 million[20] - D-Wave's Q2 2025 revenue was $22 million, with a gross profit of $20 million[23] - D-Wave's 1H 2025 revenue was $181 million, with a gross profit of $159 million and a gross margin of 876%[24, 26]

Market Valuation & Earnings Season - Market multiples are considered high but justified by the market's resilience and strong corporate performance [1][2] - Approximately 80% of companies have exceeded EPS expectations, and 70% have surpassed revenue forecasts, indicating corporate growth supports current valuations [2] AI Investment & Future Technology - AI is seen as a significant driver for market growth over the next 5 to 10 years, influencing areas like quantum computing [3][4] - Major tech companies like Microsoft and Amazon are heavily investing in AI co-pilots and cloud AI services, suggesting future revenue expansion in these areas [4] - Investment in hardware by companies like Microsoft and Alphabet signals a focus on future technologies beyond AI, such as supercomputing and quantum computing, with potential 30% to 35% CAGR [5] Quantum Computing - Pure quantum computing companies are experiencing substantial revenue growth, with IonQ reporting an 80% increase and D-Wave a 500% increase [6] - These quantum computing companies are becoming more commercial, demonstrating tangible results and value [6][7] Defiance ETF - Defiance ETF's name originates from the founder's family history, specifically their heroic rescue of Jews during the war [8]

Core Viewpoint - Defiance ETFs has launched the Defiance 2X Daily Long Pure Quantum ETF (Ticker: QPUX), which aims to provide investors with 2X daily leveraged exposure to a selected group of quantum computing companies, highlighting the potential of this transformative technology sector [1][4]. Company Overview - Defiance ETFs, founded in 2018, specializes in thematic, income, and leveraged ETFs, positioning itself as a leader in ETF innovation [5]. ETF Structure and Strategy - QPUX seeks to deliver daily investment results of 200% of the daily performance of its equal-weighted Target Portfolio, which includes IONQ, Inc. (IONQ), Rigetti Computing, Inc. (RGTI), D-Wave Quantum Inc. (QBTS), and Quantum Computing Inc. (QUBT) [2][16]. - The portfolio is rebalanced daily to maintain equal weighting among the four companies [2][16]. - The ETF utilizes derivatives, including swaps and listed options, to achieve its leveraged exposure [3][17]. Industry Context - Quantum computing leverages advanced phenomena like superposition and entanglement, enabling faster and more efficient information processing compared to classical computing [4]. - The companies within QPUX's portfolio are focused on developing quantum hardware, software, and related technologies, positioning them to benefit from advancements in the industry [4].

Financial Data and Key Metrics Changes - Revenue for the quarter totaled $166 million, slightly down sequentially and down 6% year over year, but above the high end of guidance [14][15] - Non-GAAP operating income was $23 million, and non-GAAP EPS was $0.36 [4] - Gross margin was approximately 43%, above the high end of guidance, positively impacted by higher volume and improved product mix [17] Business Line Data and Key Metrics Changes - Semiconductor business revenue was flat sequentially and grew 13% year over year, representing 75% of total revenue [15] - Revenue from the Compound Semiconductor market was flat at $14 million, accounting for 9% of total revenue [15] - Data storage revenue increased to $12 million, totaling 7% of revenue, while scientific and other revenue decreased to $16 million, also totaling 9% of revenue [15] Market Data and Key Metrics Changes - Revenue from the Asia Pacific region (excluding China) increased to 59%, up from 36% in the prior quarter, driven by sales in Taiwan and Southeast Asia [16] - Revenue from China decreased to 17% from 42% in the previous quarter, with expectations for China revenue to be about 30% in the first half of the year and around 20% in the second half [16][30] Company Strategy and Development Direction - The company is focused on capitalizing on long-term growth in the semiconductor market, particularly driven by AI and high-performance computing [21] - The company sees opportunities in adjacent mask blank steps and aims to expand its business in advanced packaging and lithography technologies [6][11] - The company is investing in additional systems to drive new business in both logic and memory, with expectations for significant revenue growth in 2025 [12][21] Management's Comments on Operating Environment and Future Outlook - Management noted that global trade dynamics and tariff policies continue to evolve, impacting costs and operational efficiency [20] - The outlook for the semiconductor market remains strong, with growth potential driven by leading-edge investments [21] - The company expects revenue in the compound semiconductor market to decline in 2025 but sees growth opportunities in GaN power, solar, and photonics applications starting in 2026 [22] Other Important Information - The company retired all $25 million of convertible senior notes due in 2027, enhancing financial flexibility [19] - Cash flow from operations totaled $9 million, with capital expenditures of $3 million during the quarter [18] Q&A Session Summary Question: Impact of China on Revenue - Management clarified that the decrease in revenue from China was expected and attributed to delayed shipments due to tariffs, which have since been resolved [27][30] Question: Customer Spending Caution - Management indicated that the caution from a major U.S. IDM customer does not significantly impact the company's business outlook, as they continue to work with leading logic players on their next nodes [35][36] Question: GaN Power Evaluation Timing - The evaluation for the 300mm GaN on Silicon system is progressing well, with potential pilot line business expected to start in 2026 [39] Question: Competitive Dynamics in GaN - Management highlighted improvements in product lines and competitive advantages in productivity and cost of ownership in the GaN on Silicon market [45][46] Question: China Revenue Guidance - Management reiterated expectations for China revenue to be around 20% in the second half of the year, consistent with prior forecasts [50][51] Question: Tariff Impact on Component Costs - Management confirmed that tariffs have impacted costs, with a forecasted 100 basis point impact in Q3 [56] Question: Technology Activity and Demand - Management noted that AI, high-performance computing, and high bandwidth memory are driving significant activity and demand in advanced packaging and lithography [62]