That’s a lot of qubits

Shares of Quantum Computing  (QUBT)  have skyrocketed into another dimension from the last 12 months, with the company’s stock climbing a you-cannot-be-serious 2,300% from this time in 2024.

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The company is one of many looking to carve a place in the tech world’s next big thing, namely, quantum computing, which uses the principles of quantum physics to perform calculations much faster than traditional computers for certain complex problems. 

A qubit, or quantum bit, is the basic unit of information used to encode data in quantum computing, similar to binary bits used in conventional computing.

“Powered by qubits, quantum computers might soon prove pivotal in addressing many of humanity’s greatest challenges, including cancer and other medical research, climate change, machine learning and artificial intelligence,” IBM  (IBM)  said on its website.

 “With a quantum computer, some problems that might take a classical computer thousands of years to solve might be solved in a matter of minutes or hours.”

Other names in the quantum computing space include Rigetti Computing  (RGTI) , and D-Wave Quantum  (QBTS) .

Quantum computing companies are expanding.

Veteran trader: stocks have all been red hot

“These stocks have all been red hot,” said TheStreet Pro’s Stephen Guilfoyle. “What drove the move? More capital flowing into growth and tech on prospects for lower short-term interest rates would be the easy answer.”

“That fact that these stocks are all more volatile than anything else in the tech space would be the slightly more complex answer,” said Guilfoyle, whose career dates back to the floor of the New Stock Exchange in the 1980s.

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Quantum Computing announced that it had entered into a securities purchase agreement with institutional investors for the acquisition of 26.9 million shares of common stock in an oversubscribed private placement. 

Guilfoyle, who raised his price target for Quantum Computing to $30 from $22, said “that’s a lot when the entire float is just 135 million shares.”

The offering is expected to result in gross proceeds of $500 million, the company said before deducting offering expenses.

Quantum Computing’s share price tumbled on the announcement and the stock was essentially flat at last check at $20.37.

Meanwhile, IonQ Inc.  (IONQ) , which saw its shares hit a record high on Sept. 24, announced on the following day “a significant technological advancement”

The company said it has successfully converted visible photons from its trapped-ion systems into telecom wavelengths, with the Air Force Research Lab supporting the prototype demonstration.

“This critical milestone paves the way for interconnecting quantum computers over vast distances using the current existing fiber optic infrastructure,” IonQ said in a statement.

In addition, the Department of Energy recently announced that it will partner with IonQ, Honeywell  (HON)  and the Electric Power Board of Chattanooga to develop technology use cases in space.

Leaders and innovations in quantum computing recently came together at the World Quantum Congress at Capital One Hall in Tysons, VA.

Firm says governments are investing in quantum computing 

“When it comes to quantum technology, investment is surging and breakthroughs are multiplying,” the consulting firm McKinsey said in a July report.  

“Private and public investors are increasingly confident that QT (quantum technology) start-ups will generate measurable value.”

Related: Quantum Computing’s unexpected move sends shares reeling

 In 2024, the firm said, investors poured nearly $2 billion into QT start-ups worldwide, up 50% from the previous year.

Private sector funding from venture capital and private equity firms accounted for two-thirds of that total McKinsey said, or about $1.3 billion, a decline of 19 percentage points compared with 2023. 

“Public funding took up the reins, increasing 19 percentage points relative to 2023 to account for 34% of 2024 funding, or $680 million,” the report said, “This shows increased urgency from governments to invest in QT’s potential.”

Global governments’ $680 million worth of investments in quantum technology start-ups in 2024 was only part of their commitment to the sector, the firm said. Overall, governments announced $1.8 billion in funding for all types of QT endeavors in 2024.

McKinsey said that most new start-ups launched in 2024 are developing equipment and components or application software. The firm said it anticipated a value shift with QT start-ups moving from hardware toward software in the next five to ten years.

For the first time since McKinsey began monitoring the QT market four years ago, the firm said that it is seeing a shift from development to deployment. 

“Much of the innovation that emerged in 2024 has made QT safer and more secure,” the firm said. “And while the QT start-up ecosystem is fertile ground for potential breakthroughs, leading technology companies drove the bulk of change in 2024.” 

Companies such as Amazon, Google, IBM, and Microsoft continued to progress in quantum innovation, unveiling key breakthroughs that signal a new era for the industry, McKinsey said. 

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