Quantum Computing Shares Jump on Analyst Buy Calls

Quantum Computing shares climbed 13.65% to $11.28 on Monday after analysts reiterated Buy ratings and investors responded to a broader market rally.

Rosenblatt Securities analyst John McPeake reaffirmed a Buy rating and kept a $22 price target on June 10. Ascendiant Capital Markets’ Edward Woo also maintained a Buy rating and raised his price target to $30 from $27, citing achievable revenue expectations and the company’s software potential.

Over the past 12 months, Quantum Computing shares have fallen about 53%. Peer companies posted gains over the same period: Rigetti Computing about 73%, IonQ roughly 51% and D-Wave Quantum about 46%.

Analysts pointed to recent corporate moves and product plans as reasons for their outlook. Quantum Computing completed an all-cash $100 million acquisition of Luminar Semiconductor in February. Analysts’ summaries show the acquisition contributed $3.7 million in revenue in the company’s most recent quarter. Based on conversations with management, Ascendiant’s Edward Woo considers consensus full-year revenue estimates of $20 million to $25 million reasonable.

Hardware roadmaps remain a focus. Dirac is the company’s flagship photonic quantum-computing platform and was first offered through cloud access in 2022. Company materials and analyst notes indicate a more powerful Dirac 3 system is scheduled for launch and a separate next-generation platform is under development. In 2024, the company won a NASA contract to use a third-generation Dirac system to enhance satellite radar imagery.

Commercial activity has begun alongside government work. McPeake highlighted a sale last year of a $332,000 quantum system to an unnamed large financial institution and a live cybersecurity demonstration conducted at a conference in March. He expects revenue from quantum networking and cybersecurity applications to increase over time and noted management’s goal of shrinking hardware from rack-mounted systems to smaller chips in coming years.

Edward Woo wrote, “We expect a corresponding growth in demand for quantum software to run on these computers.” The company’s Qatalyst platform is designed to let developers solve computational problems without expertise in low-level quantum programming languages.

The company’s corporate history includes earlier businesses as an inkjet-cartridge seller and a beverage distributor before shifting to quantum optics and photonic computing technologies. Market participants are watching upcoming product launches, reported commercial wins and future quarterly results for evidence of revenue growth tied to product developments.