Industry Overview - Quantum computing is attracting investor interest due to its potential for significant commercial disruption and long-term technological ambition [1] - The industry is in early stages, but progress in optimization, simulation, and advanced analytics is becoming clearer [1] Company Strategies - Rigetti Computing focuses on superconducting, gate-based quantum processors and aims for fault-tolerant systems through a modular "chiplet" approach [5][10] - IonQ utilizes trapped-ion technology, emphasizing qubit quality and customer traction, with a clearer commercialization narrative [6][12] Price Performance - Rigetti's stock has increased by 118.3% over the past six months, while IonQ's stock has risen by 25.7% during the same period [3] Business Models - Rigetti's revenue model is heavily reliant on research-driven customers, including government agencies and early enterprise pilots, which may not stabilize revenue [8] - IonQ is focusing on commercialization by making its systems accessible through cloud platforms, allowing for a monetization strategy based on customer usage [9] Growth Expectations - The Zacks Consensus Estimate for Rigetti's 2025 sales indicates a year-over-year decline of 26.88%, with a projected loss per share of 68 cents [14] - In contrast, IonQ's 2025 sales are expected to grow by 151.78%, with a projected loss per share of $5.08 [17] Investment Considerations - Rigetti is seen as a longer-term investment focused on hardware scalability, while IonQ offers a more immediate path to usability and customer adoption [13][22] - Both companies currently hold a Zacks Rank of 3 (Hold) and a Value Score of F, indicating that their stocks are priced based on future potential rather than current fundamentals [20]

Core Insights - Quantum computing is a transformative technology with the potential to outperform traditional supercomputers, as demonstrated by D-Wave Quantum's capabilities [1][3] - The competition between D-Wave and IBM highlights the challenges and opportunities in the quantum computing sector, particularly in achieving "quantum advantage" [2][12] D-Wave Overview - D-Wave specializes in annealing quantum computers, claiming to have solved problems beyond the reach of supercomputers [3][4] - The company reported revenue of $21.8 million for the first three quarters of 2025, a significant increase from $6.5 million in 2024, but also faced an operating loss of $65.5 million due to rising expenses [6] - D-Wave is also exploring quantum gate technology to enhance its capabilities, claiming to be the only company utilizing both annealing and gate-based methods [5] IBM Overview - IBM has a long history in technology and has made significant advancements in quantum computing, including the launch of its Qiskit software and cloud-based quantum devices [7][8] - The company announced its new Nighthawk quantum processor, aiming to achieve quantum advantage by the end of 2026, and plans to develop a fault-tolerant quantum computer by 2029 [10][11] - IBM's revenue for the first three quarters of 2025 was $47.8 billion, reflecting a 6% year-over-year increase, with a net income of $5 billion [11] Investment Comparison - When comparing D-Wave and IBM for investment, technological superiority and share price valuation are critical factors [12][14] - D-Wave's price-to-sales ratio remains high compared to its historical levels and is significantly above IBM's, suggesting that IBM may offer better value [14] - Given IBM's advancements and financial stability, it is positioned as the superior long-term investment in quantum computing compared to D-Wave [14]

Core Insights - Horizon Quantum Computing has successfully assembled and integrated its first operational quantum computer at its headquarters in Singapore, marking it as the first quantum software company to own and operate such a system [1][2][3] Company Developments - The quantum computer was assembled from best-in-class components, including Maybell's cryogenic platform, Quantum Machines' control electronics, and a Rigetti superconducting quantum processor, establishing a testbed facility capable of hosting multiple systems [4][5] - The modular design of the quantum system allows for the swapping of control electronics and quantum processors, enabling diverse configurations and architectures for software integration [5] - Horizon Quantum aims to provide hardware-agnostic development tools for quantum computers, with plans to operate across various hardware platforms, including cloud-based systems and traditional data centers [5][6] Strategic Vision - The company emphasizes the importance of tight integration between hardware and software to achieve quantum advantage, positioning itself to build a sophisticated development and execution stack that closely coordinates with hardware control systems [6][7] - Horizon Quantum's integrated development environment, Triple Alpha, is expected to enhance its functionality through the commissioning of the new quantum computer, facilitating seamless quantum application development [3][9] Leadership and Future Plans - Dr. Joe Fitzsimons, founder and CEO, expressed confidence that establishing an in-house hardware testbed will significantly contribute to the company's mission of solving complex real-world problems through quantum computing [6] - The company is in the process of completing a business combination with dMY Squared Technology Group, which is anticipated to accelerate its growth and execution towards its vision [7][12]

Core Insights - Quantum computing is gaining significant attention due to its potential to solve complex problems that classical systems cannot handle, presenting a unique investment opportunity in a future trillion-dollar industry [1] Company Approaches - Rigetti Computing (RGTI) is advancing a gate-based superconducting architecture aimed at universality and scalability, recently launching a 36-qubit system with a median two-qubit gate fidelity of approximately 99.5% [5][12] - D-Wave Quantum (QBTS) focuses on quantum annealing and hybrid solvers for immediate deployment in optimization problems, providing a near-term value proposition for industries [6][13] Price Performance - RGTI shares have increased by 67.5% year-to-date, while QBTS stock has surged by 166.7% in the same period [3] Business Models - RGTI's revenue is primarily derived from government contracts and research collaborations, leading to unpredictable revenue flows [8] - QBTS is pursuing a diversified revenue model that includes hardware sales and enterprise engagements, indicating a shift towards a more stable revenue base [9] Recent Financials - RGTI reported revenues of approximately $1.9 million, down from $2.4 million year-over-year, with elevated operating expenses of around $21 million [10] - QBTS experienced a strong quarterly performance with revenues doubling to $3.7 million and a significant increase in cash reserves to $836.2 million [11] Future Projections - The Zacks Consensus Estimate for RGTI's 2025 sales indicates a year-over-year decline of 23.82%, with a projected loss per share of 68 cents [15] - In contrast, QBTS's 2025 sales are expected to grow by 188.6%, with a projected loss per share of 23 cents [18] Investment Considerations - RGTI is positioned for long-term scalability with its gate-based systems, while QBTS offers immediate commercial activity and momentum [23] - The choice between RGTI and QBTS depends on investor preference for near-term traction versus long-term potential in quantum computing [14][23]

Core Insights - The article discusses the advancements in AI technology by Quantum Computing Inc. (QCi) and IBM, highlighting their respective approaches and market positions in the AI industry [1][2]. Quantum Computing Inc. (QCi) - QCi is focused on developing quantum computers that utilize photons, which can operate at room temperature and be miniaturized, unlike IBM's current quantum technology [3]. - QCi's EmuCore quantum computer is designed for training AI models, offering faster data processing and lower energy consumption compared to traditional computers, although it reported only $384,000 in revenue for Q3 against operating costs of $10.5 million [5]. - The company raised $750 million through an equity offering in October to support its operations [5]. IBM - IBM's AI business generated $9.5 billion in Q3, contributing to total revenue of $16.3 billion, reflecting a 9% year-over-year increase [6][7]. - The company is developing its Nighthawk quantum processor, expected to achieve quantum advantage next year, which would enhance its AI capabilities significantly [8][9]. - IBM reported a net income of $1.7 billion in Q3 and has a dividend yield of over 2%, showcasing its profitability and commitment to returning value to shareholders [9][10]. Investment Comparison - IBM's strong sales and advancements in quantum computing position it as a more attractive investment compared to QCi, which has high operating costs and limited sales [13][14]. - QCi's price-to-sales (P/S) ratio has been significantly higher than IBM's, indicating that QCi's shares are overvalued relative to its sales performance [11][13]. - IBM's consistent dividend payments and established revenue streams make it a superior investment choice in the AI sector [14].

Industry Overview & Investment - Quantum computing is attracting billions of dollars in investment, potentially leading to a revolution in computing larger than generative AI [1] - Potential investors are showing increasing interest in the implications of quantum computing, with political and state-level economic support driving its development [2] Key Players & Technology - IBM is a leading company in quantum computing, having developed foundational aspects of quantum information science since 1970 [2] - Quantum computing relies on qubits, which can hold multiple values simultaneously, unlike classical computing's bits that are either zero or one [5] - Error mitigation is currently used to address errors in quantum computers, but this approach is expected to evolve [6] IBM's Developments & Strategy - IBM made quantum computing available on the cloud in 2016, marking a pivotal moment for the field [7] - IBM aims to achieve quantum advantage, where quantum computers outperform classical computers in speed, cost, or accuracy, and expects to see examples of this soon [7] - IBM is targeting a significant quantum computing payoff by 2029, with a roadmap detailing their progress [22][23] Applications & Use Cases - Quantum computing has potential applications in healthcare, such as transforming drug discovery and understanding biological systems [3][16][17] - Financial markets are another target for quantum computing, with applications in portfolio optimization, risk management, and cybersecurity [17][18][19][20] - Quantum computing could benefit agriculture through improved fertilizer production and climate change mitigation [21] Competition & Metrics - IonQ claims its machines are 36 quadrillion (36 * 10^15) times more powerful than competitors' and aims for a fully fault-tolerant 2 million qubit system with costs under $30 million [26][27] - Different companies use various metrics to measure quantum computing progress, including total qubits (IBM), algorithmic qubits (IonQ), and quantum volume (Continuum) [29][30]

Core Insights - IBM announced significant advancements in quantum computing, aiming for quantum advantage by the end of 2026 and fault-tolerant quantum computing by 2029 [1][11]. Quantum Processor Development - IBM introduced the Quantum Nighthawk processor, designed to achieve quantum advantage by solving problems more efficiently than classical methods, with delivery expected by the end of 2025 [3]. - Future iterations of the Nighthawk processor are projected to support up to 7,500 gates by the end of 2026, increasing to 10,000 gates in 2027, and potentially 15,000 gates by 2028 [3][5]. Quantum Advantage Tracking - IBM, along with partners, is contributing to a community-led quantum advantage tracker to validate quantum advantage claims, with the first confirmed cases expected by the end of 2026 [4][6]. - The tracker currently supports three experiments focused on observable estimation, variational problems, and efficient classical verification [6]. Error Correction and Fault-Tolerant Computing - IBM's Quantum Loon processor demonstrates all necessary components for fault-tolerant quantum computing, achieving efficient quantum error correction with a ten-fold speedup over existing methods [12][13]. - The company has successfully used classical hardware for real-time error decoding in under 480 nanoseconds, a year ahead of schedule [13]. Fabrication and Development Speed - IBM is transitioning to a 300mm wafer fabrication facility to enhance the development speed of quantum processors, achieving a ten-fold increase in physical complexity [14][15]. - The new facility allows for faster learning and improvement of quantum processor capabilities, including increased qubit connectivity and performance [15]. Software Enhancements - IBM's Qiskit software has been enhanced to provide developers with greater control, achieving a 24% increase in accuracy and reducing the cost of accurate result extraction by over 100 times [8][9]. - Future plans for Qiskit include extending computational libraries for machine learning and optimization by 2027 [10].

Core Insights - Regetti Computing's shares have seen a significant increase of approximately 2,000% over the past year, despite a revenue miss in Q3 [1] - The company emphasizes the long-term potential of quantum computing, which is expected to revolutionize computing speed and energy efficiency [3][4] - Current focus remains on research and development (R&D), with a projected timeline of 3 to 4 years before achieving quantum advantage over classical computing [8] Company Overview - Regetti Computing currently has a market capitalization of $10 billion but reports minimal revenue, prompting discussions on how investors should value its shares [2] - The company is in the R&D phase, working towards perfecting quantum computing technology [4][5] Industry Context - Quantum computing is anticipated to produce computers that are millions to billions of times faster than conventional computers while consuming significantly less energy [3] - The industry is moving towards a hybrid computing ecosystem where quantum processing units (QPUs) will coexist with traditional CPUs and GPUs in data centers [10][11] - Companies like IBM and HSBC are beginning to showcase specific use cases for quantum computing, indicating progress in the field [6][7] Future Projections - The transition from R&D to monetization is uncertain, with expectations that practical workloads for quantum computers in data centers will emerge in the next 3 to 5 years [9][14] - The concept of quantum advantage, where quantum computing clearly outperforms classical computing, is projected to be realized in about 3 to 4 years [8][14]

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $1.9 million, down from $2.4 million in Q3 2024, impacted by the expiration of the National Quantum Initiative [12] - Gross margins in Q3 2025 were 21%, compared to 51% in Q3 2024, due to revenue composition and pricing variability [12][13] - Operating loss for Q3 2025 was $20.5 million, compared to $17.3 million in the prior year [14] - GAAP net loss for Q3 2025 was higher than in Q3 2024, primarily due to non-cash changes in fair value of derivative liabilities [15] - As of September 30, 2025, the company had approximately $558.9 million in cash and equivalents, with no debt [15] Business Line Data and Key Metrics Changes - The company announced purchase orders totaling approximately $5.7 million for two 9-qubit Novera quantum computing systems, which are upgradable [6][7] - A three-year, $5.8 million contract from the Air Force Research Laboratory (AFRL) was announced to advance superconducting quantum networking [8] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress impacted revenue [12] - The company is engaged with various academic and government institutions to advance quantum computing capabilities [9][10] Company Strategy and Development Direction - The company plans to deliver a 100+ qubit chiplet-based quantum system by the end of 2025, with a roadmap to deploy a 150+ qubit system by the end of 2026 and a 1,000+ qubit system by the end of 2027 [5][6] - The company is focusing on public-private partnerships to advance quantum technologies [9] - The company intends to open an Italian subsidiary to pursue business opportunities in the region [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future sales driven by recent contracts and collaborations, despite current revenue challenges [12][15] - The company is focused on achieving quantum advantage within the next three to five years, targeting 1,000 qubits with 99.9% fidelity [18][22] - Management is optimistic about potential funding increases for quantum initiatives from the U.S. government [88][89] Other Important Information - The company is exploring options for a new chip fab facility to enhance capabilities beyond the current 150 mm fab [63][66] - The potential investment for a new quantum fab could be in the hundreds of millions of dollars, significantly less than a traditional CMOS fab [66] Q&A Session Summary Question: Can you talk about DARPA phase B and the feedback received? - Management noted that while not selected for phase B, constructive feedback was received, focusing on error correction and long-range coupling [17][18] Question: What is the comfort level for achieving 99% fidelity by 2027? - Management expressed confidence in achieving 99.7% fidelity at 150+ qubits by 2026 and 99.8% at 1,000 qubits by 2027 [22][23] Question: Will the 1,000-qubit system be chiplet-based? - The plan is to use 36-qubit chiplets for the 1,000-qubit system, with no significant challenges anticipated for long-range coupling [28][30] Question: How will revenue recognition work for the Novera sales? - Revenue for the two Novera systems will be recognized upon shipment, expected in Q1 and Q2 of 2026 [32] Question: What is the expected gross margin profile moving forward? - Management indicated that margins may improve with upcoming sales, particularly from Novera systems [71] Question: What types of applications will the 1,000-qubit system run? - The system is expected to handle complex applications like drug discovery and financial forecasting, which current CPUs and GPUs struggle with [76][77] Question: How does the recent funding from the Energy Department affect the business? - The reinstatement of the National Quantum Initiative funding is seen as a positive step, although discussions for higher funding amounts are ongoing [88][89]

Financial Data and Key Metrics Changes - Revenues in Q3 2025 were $1.9 million, down from $2.4 million in Q3 2024, impacted by the expiration of the National Quantum Initiative [10] - Gross margins decreased to 21% in Q3 2025 from 51% in Q3 2024, attributed to the composition of revenue and pricing variability [10] - Total operating expenses increased to $21 million in Q3 2025 from $18.6 million in the same period of the prior year, due to salary increases, new hires, and higher stock-based compensation [11] - GAAP net loss for Q3 2025 was higher than in Q3 2024, primarily due to a non-cash change in the fair value of derivative warrant and earn-out liabilities [12] - As of September 30, 2025, the company had approximately $558.9 million in cash and equivalents, with no debt, and this increased to approximately $600 million by November 6, 2025 [12] Business Line Data and Key Metrics Changes - The company announced purchase orders totaling approximately $5.7 million for two 9-qubit Novera quantum computing systems, which are upgradable [5] - A three-year, $5.8 million contract from the Air Force Research Laboratory (AFRL) was secured to advance superconducting quantum networking [6] Market Data and Key Metrics Changes - The expiration of the National Quantum Initiative and its pending reauthorization in the U.S. Congress impacted revenue, with future sales dependent on its renewal [10] - The company is engaged with various academic and government sectors to enhance quantum computing capabilities, including collaborations with Montana State University and the Center for Development of Advanced Computing [7][8] Company Strategy and Development Direction - The company aims to deliver a 150-plus qubit system by the end of 2026 and a 1,000-plus qubit system by the end of 2027, with anticipated gate fidelity improvements [4][5] - The strategy includes deepening support for quantum computing capabilities in academic and government sectors and integrating with NVIDIA's NVLink for AI supercomputer quantum integration [8] - The company plans to open an Italian subsidiary to accelerate business opportunities in the region [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future sales from recent contracts and collaborations, which are expected to benefit revenue in Q4 2025 and into 2026 [10] - The management acknowledged challenges in achieving long-range coupling and error correction, which are critical for future milestones [17] - The company is optimistic about being selected for phase B of the DARPA Quantum Benchmarking Initiative project in the coming months [18] Other Important Information - The company is exploring options for potential M&A to accelerate its roadmap, although it believes it can execute its current plans organically [47][48] - The company is considering significant capital expenditures for upgrading its chip fabrication facility in the future [56][60] Q&A Session Summary Question: Can you talk about DARPA phase B and the feedback received? - Management noted that while they were not selected for phase B, constructive feedback was received regarding error correction and long-range coupling, which are important for future milestones [16][17] Question: What is the comfort level for achieving 99% fidelity by 2027? - Management expressed confidence in achieving 99.8% fidelity with 1,000 qubits by the end of 2027, emphasizing the importance of error correction [20][22] Question: Will the 150-qubit and 1,000-qubit systems use chiplet-based approaches? - The company plans to use 9-qubit chiplets for the 150-qubit system and 36-qubit chiplets for the 1,000-qubit system [27] Question: How will revenue recognition work for the Novera system sales? - Revenue for the two Novera systems will be recognized upon shipment, expected in Q1 and Q2 of 2026 [31] Question: What is the expected gross margin profile moving forward? - Management indicated that while gross margins were lower in Q3, future sales, particularly from Novera, are expected to have better margins [64] Question: How does the recent funding for the National Quantum Initiative affect the business? - Management noted that the reinstatement of funding to $625 million over five years is a positive step, although discussions for higher funding amounts are ongoing [81][82]