This week, David Westin examines the success of Spain’s biggest bank and delves into the strange world of quantum computing https://t.co/cwGgcoIqZX ...

Core Insights - The quality of stocks leading the market surge is crucial for understanding future market movements [1][3] - Major stock indexes like the S&P 500, Dow Jones, and Nasdaq have reached all-time highs, indicating a strong market performance [1][4] Valuation Metrics - The S&P 500's Shiller Price-to-Earnings (P/E) Ratio has peaked at 41.20, the second-highest in a continuous bull market since January 1871 [5] - The "Buffett indicator," which measures the total value of public companies against U.S. GDP, recently exceeded 225%, significantly above its historical average of 85% [6] Performance Comparison - The S&P 500 outperformed the S&P 500 Quality Index by 11.5% over the last six months, a trend last seen before the dot-com bubble burst [7][9] - The S&P 500 Quality Index, which tracks high-quality stocks, has underperformed the broader S&P 500, suggesting potential market risks ahead [9][10] Historical Context - Historical trends indicate that when high-risk stocks lead the market, it often precedes downturns [10][11] - The last significant underperformance of the S&P 500 Quality Index occurred 11 months before the dot-com bubble burst in March 2000 [9] Market Cycles - Short-term market corrections are common and can present opportunities for long-term investors to acquire high-quality stocks [12][14] - The average duration of S&P 500 bear markets is approximately 286 days, while bull markets last about 1,011 days, indicating a longer-term upward trend in the market [16][17] Economic Outlook - Despite short-term volatility, the long-term outlook for equities remains positive due to the nonlinear nature of economic cycles and the potential for corporate earnings growth [18]

Core Insights - Quantum Computing reported third-quarter earnings that exceeded Wall Street expectations, leading to a significant increase in market confidence and a subsequent rise in stock price [1][2] - The company achieved a net profit of $2.4 million (or $0.01 per share) for the quarter ending in September, a notable improvement from a loss of $5.7 million (or $0.06 per share) in the same period last year, while analysts had anticipated a loss of $0.06 per share [1] - Revenue surged by 280% year-over-year to $384,000, far surpassing the market expectation of $100,000, attributed to increased contracts in R&D services and custom hardware [1] Financial Performance - Operating expenses rose to $10.5 million, up from $5.4 million in the same quarter last year, primarily due to expanded investments in engineering, R&D, and manufacturing to support business growth [1] - As of the end of the third quarter, the company held $352 million in cash and $461 million in investments, with a successful financing round of $750 million post-quarter, bringing total liquid assets to over $1.5 billion [2] Business Developments - Quantum Computing secured a procurement order from a top U.S. bank for its quantum network security solutions, marking a significant step in the commercialization of its quantum security platform [2] - The company is accelerating its efforts in quantum artificial intelligence and cybersecurity solutions, responding to growing demand across various industries [2] - A partnership with NASA has deepened, focusing on a joint project to apply quantum optimization technology to spaceborne lidar data [2] Market Reaction - Following the earnings announcement, Quantum Computing's stock rose over 13% in after-hours trading, although it remains down nearly 36% year-to-date as of Friday's close [2]

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Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled approximately $384,000, a significant increase from $101,000 in the same period last year, primarily due to growth in research and development services contracts and custom hardware contracts [13] - Gross margin improved to 33% compared to 9% in Q3 2024, although variability is expected due to a small number of active contracts [14] - Net income for Q3 2025 was $2.4 million, or approximately $0.01 per share, compared to a net loss of $5.7 million in Q3 2024 [16] - Total assets increased to $898 million as of September 30, 2025, up from $154 million at year-end 2024 [17] Business Line Data and Key Metrics Changes - The company recorded revenue from the NASA LIDAR initiative and completed a transaction with a major U.S. financial institution, validating its quantum AI and security platforms [7] - Revenue recognition began for cloud-based access to the Direct3 quantum optimization system during Q3 [14] Market Data and Key Metrics Changes - The company is seeing growing adoption of quantum and photonic solutions across research, enterprise, and government sectors, indicating a positive trend in market demand [7] - The integrated photonics platform is positioned to address global energy constraints and computational demands, making it relevant for various sectors [11] Company Strategy and Development Direction - The company aims to transition from prototype and small-batch manufacturing to volume production by the end of the decade, focusing on refining processes and expanding facilities [5][12] - The long-term strategy includes evaluating acquisition opportunities to accelerate the vision of making quantum technology accessible [15] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of scaling engineering and manufacturing capabilities and strengthening relationships across government, industry, and academia [19] - The company is positioned to deliver energy-efficient room-temperature quantum devices, which are critical for the next generation of computing [11] Other Important Information - The company raised $500 million in Q3 and an additional $750 million post-quarter, significantly strengthening its balance sheet [3][15] - Operating expenses increased to $10.5 million in Q3 2025, reflecting growth in personnel across various departments [16] Q&A Session Summary Question: Details on Poet Technologies partnership - Management discussed active talks with multiple parties on using thin-film lithium niobate technology for high-speed transceiver technology, highlighting the collaboration with Poet Technologies [22] Question: Use cases for quantum security solutions - Management mentioned discussions with firms to apply quantum communication technology to aerospace platforms and the potential for smaller quantum communication systems [23][24] Question: M&A opportunities and market conditions - Management acknowledged the volatile M&A market and is actively evaluating acquisition candidates to enhance customer revenue and technology roadmap [26][27] Question: CapEx for Fab 1 and plans for Fab 2 - Fab 1 is fully operational with an additional CapEx of about $2 million planned for high-speed testing equipment, while Fab 2 is being scoped for both internal needs and external demand [35][36] Question: International opportunities - Management confirmed active discussions for international partnerships and sales, including projects in Europe and South Korea [57]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled approximately $384,000, a significant increase from $101,000 in the same period last year, primarily due to growth in research and development services contracts and custom hardware contracts [13] - Gross margin improved to 33% in Q3 2025, compared to 9% in Q3 2024, although variability is expected due to a small number of active contracts [14] - Net income for Q3 2025 was $2.4 million, or approximately $0.01 per share, compared to a net loss of $5.7 million in Q3 2024 [16] - Total assets increased to $898 million as of September 30, 2025, up from $154 million at year-end 2024 [17] Business Line Data and Key Metrics Changes - The company recorded revenue from its NASA LiDAR initiative, showcasing the practical application of its quantum technology [7] - Revenue recognition began for cloud-based access to the Dirac-3 quantum optimization system during Q3 [14] - Significant commercial engagements included a transaction with a major U.S. financial institution, validating the company's quantum AI and security platforms [7] Market Data and Key Metrics Changes - The company is actively engaging with various sectors, including aerospace, defense, telecommunications, finance, and data security, to expand the adoption of its quantum solutions [4] - The integrated photonics approach allows for room temperature operation, making the technology more accessible and scalable across industries [4][11] Company Strategy and Development Direction - The long-term goal is to transition from prototype and small-batch manufacturing to volume production by the end of the decade [5] - The current three-year roadmap focuses on refining processes, scaling production, and expanding the team and facilities to support industrial-scale output [5][12] - The company aims to leverage its thin-film lithium niobate technology for next-generation high-speed transceiver technology, indicating a strategic focus on telecommunications [22] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of scaling engineering and manufacturing capabilities to meet growing demand and drive future growth [19] - The company is positioned to deliver energy-efficient room-temperature quantum devices, which are critical for the next generation of computing [11] - Management expressed confidence in the company's ability to navigate the evolving landscape of quantum technology and maintain a competitive edge [19] Other Important Information - The company raised $500 million in Q3 2025 and an additional $750 million post-quarter, significantly strengthening its balance sheet [3][15] - Operating expenses increased to $10.5 million in Q3 2025, reflecting growth in personnel across various functions to support expansion [16] Q&A Session Summary Question: Details on partnership with POET Technologies - Management confirmed active discussions with multiple parties regarding the use of thin-film lithium niobate technology for high-speed transceiver applications, highlighting the collaboration with POET as a significant opportunity [21][22] Question: Use cases for quantum security solutions - Management discussed ongoing discussions with firms to apply quantum communication technology in various sectors, including aerospace, indicating a broad interest beyond security solutions [23][24] Question: M&A opportunities and market conditions - Management acknowledged the volatility in the M&A market but confirmed active evaluation of acquisition candidates to accelerate commercialization and fill technology gaps [25][26] Question: CapEx for Fab 1 and plans for Fab 2 - Management indicated that Fab 1 is fully operational with plans for additional CapEx of about $2 million for high-speed testing equipment, while Fab 2 is being scoped for both internal needs and external demand [34][36] Question: International opportunities - Management confirmed ongoing efforts to explore international markets, including sales to institutions in Europe and partnerships in South Korea [58]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 totaled approximately $384,000, compared to $101,000 in the same period last year, primarily due to increases in research and development services contracts and custom hardware contracts [12][14] - Gross margin for Q3 increased to 33% compared to 9% in Q3 2024, although variability is expected due to a small number of active contracts [14] - Net income for Q3 was $2.4 million, or approximately $0.01 per share, compared to a net loss of $5.7 million in Q3 2024 [16] - Total assets stood at $898 million at the end of Q3 2025, up from $154 million at year-end 2024 [17] Business Line Data and Key Metrics Changes - The company recorded revenue from the NASA LIDAR initiative and completed a transaction with a major U.S. financial institution, validating its quantum AI and security platforms [6][7] - The foundry operations in Tempe, Arizona, continue to progress, with plans for Fab 2 to support higher volume manufacturing [8][12] Market Data and Key Metrics Changes - The company is seeing growing adoption of quantum and photonic solutions across research, enterprise, and government sectors, with increasing interest from prospective customers [10][11] - International opportunities are being explored, with sales to institutions in Europe and discussions with potential partners in South Korea and Singapore [37] Company Strategy and Development Direction - The long-term goal is to transition from prototype and small-batch manufacturing to volume production by the end of the decade, focusing on refining processes and expanding facilities [5][12] - The company aims to position itself uniquely in the market by leveraging its integrated photonics platform, which operates at room temperature and offers significant SWaP-C advantages [11] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of scaling engineering and manufacturing capabilities, advancing customer programs, and strengthening relationships across various sectors [18] - The company is actively evaluating acquisition opportunities to accelerate its vision of making quantum technology accessible [15][16] Other Important Information - The company raised $500 million in Q3 and an additional $750 million post-quarter, significantly strengthening its balance sheet [3][15] - Operating expenses for Q3 totaled $10.5 million, up from $5.4 million in the same quarter last year, driven by growth in personnel across various functions [16] Q&A Session Summary Question: Details on Poet Technologies partnership - The company is actively discussing using thin-film lithium niobate technology for next-generation high-speed transceiver technology, with Poet Technologies being one of the collaborations [20][21] Question: Use cases for quantum security solutions - Discussions are ongoing with firms to apply quantum communication technology to various sectors, including aerospace and telecommunications [22] Question: Remaining CapEx for Fab 1 - Fab 1 is fully operational, with an additional CapEx of about $2 million planned for high-speed testing equipment [25][26] Question: Plans for Fab 2 - Fab 2 is being scoped to support both the company's quantum machine manufacturing and to serve external demand for thin-film lithium niobate chips [26] Question: Share count at the end of 2026 - The company currently has 224 million shares outstanding and does not expect to conduct another financing, with a potential increase of a few million shares from options [27][28] Question: International opportunities - The company is exploring international markets and has made sales to institutions in Europe and discussions in South Korea [37]

Core Insights - Quantum Computing (QUBT) reported third quarter earnings that exceeded consensus estimates, with a profit of 1 cent per share compared to a loss of 6 cents a year earlier, and revenue surged 280% to $384,000 [1][2] - Analysts had anticipated a loss of 6 cents and revenue of $100,000 for the quarter, indicating a significant positive surprise [2] - The company attributed revenue growth to increased research and development services and custom hardware contracts, as well as the recognition of revenue from cloud-based access to its quantum optimization system [2] Financial Performance - For the September-ending quarter, Quantum Computing achieved a revenue of $384,000, a substantial increase from the previous year [1] - The company ended the quarter with $352 million in cash and $461 million in investments, and subsequently raised an additional $750 million, resulting in a total liquid position of over $1.5 billion [4] Stock Market Reaction - Following the earnings report, QUBT stock rose more than 7% to $11.38 in extended trading, recovering from a 42% decline in 2025 prior to the report [3] - The stock gained over 5% during the regular trading session on the day of the earnings announcement [3] Technical Ratings - Quantum Computing stock holds a Composite Rating of 45 out of a best-possible 99, indicating room for improvement in growth metrics [6] - The stock has an Accumulation/Distribution Rating of B-minus, reflecting moderate institutional buying activity [7] - The average true range (ATR) for QUBT stock is 9.60%, suggesting higher volatility compared to the ideal range of up to 8% [7]

Core Insights - Quantum Computing Inc. (QCi) reported a significant revenue increase of 280% year-over-year for Q3 2025, driven by sales growth and demand for its products, including a notable sale to a top 5 U.S. bank [2][6] - The company ended Q3 2025 with $352 million in cash and $461 million in investments, raising an additional $750 million post-quarter, resulting in a total liquid position exceeding $1.5 billion [3][6] - QCi achieved a net income of $2.4 million for Q3 2025, a turnaround from a net loss of $5.7 million in the same period last year, primarily due to a gain from the mark-to-market of a derivative liability [6][13] Financial Highlights - Q3 2025 revenues were approximately $384,000 with a gross margin of 33%, compared to $101,000 and 9% gross margin in Q3 2024 [6][13] - Operating expenses for Q3 2025 totaled $10.5 million, up from $5.4 million in Q3 2024, reflecting ongoing investments in R&D and manufacturing [6][13] - Total assets increased to $898.2 million as of September 30, 2025, from $153.6 million at the end of 2024, with cash and cash equivalents rising by $273.5 million [6][13] Operational Highlights - QCi made strides in commercial traction with its quantum AI and cybersecurity solutions, including a purchase order from a top 5 U.S. bank for quantum security solutions [6] - The company continued its collaboration with NASA, applying its Dirac-3 quantum optimization machine to enhance atmospheric sensing capabilities [6] - QCi is expanding its photonic chip foundry operations in Arizona, focusing on stabilizing production processes and planning for a larger facility to support higher-volume production [11]

Core Insights - Major stock indexes are near all-time highs, but leading companies in AI and quantum computing have experienced significant corrections, indicating a market rotation [1][2] - This correction may set the stage for future advances, as many innovative companies have reached major technical support levels, presenting favorable risk-reward opportunities for investors [2][4] Group 1: Company Analysis - IonQ has seen a 50% correction over the past month but is showing signs of stabilization after testing its 200-day moving average, suggesting a potential bottom formation [5][6] - Arista Networks has retraced into a buy zone, filling a prior gap, which often attracts institutional buyers and positions the stock for a potential upward movement [9][10][11] - AppLovin, while not traditionally categorized as an AI stock, has demonstrated strong growth driven by AI enhancements and is forming a bullish consolidation pattern, indicating a potential breakout opportunity [12][13][14] Group 2: Investment Opportunities - The recent pullbacks in the AI and quantum sectors have created technically attractive levels for IonQ, Arista Networks, and AppLovin, all of which are benefiting from strong long-term growth drivers [17][18] - Investors looking to accumulate shares in leading AI infrastructure, quantum computing, and AI implementation companies may find favorable risk-reward setups at current price levels [18]