Superconducting Qubits

D-Wave Quantum has executed a definitive agreement with the U.S. Department of Commerce, based on its previously announced Letter of Intent, giving it access to up to $100 million in funding under the U.S. CHIPS and Science Act to accelerate research and development of its annealing and gate-model quantum systems. NTT DOCOMO, Japan's largest mobile operator, deployed a second D-Wave-powered quantum computing application in production, which cut location-registration signals generated when devices crossed tracking-area-list boundaries by 65.3% at the daily peak and reduced paging signals by 7.0%. D-Wave was also awarded up to CAD $300,000 from the National Research Council of Canada's Applied Quantum Computing Challenge program to advance annealing quantum computing software for commercial applications, and AT&T agreed to expand its use of D-Wave's quantum computing technology to address complex optimization challenges across its network operations. Separately, Rigetti plans to partner with HPE and Pittsburgh Supercomputing Center to build the TangleLab supercomputing testbed, delivering a 9-qubit Novera system to the testbed, which is funded by a $5 million National Science Foundation grant, while Quantum Computing signed a three-year framework agreement with Hamad Bin Khalifa University in Qatar covering quantum computing, quantum sensing and quantum communications. Over the past year, QBTS shares have lost 36.2% compared with the broader Internet Software industry's 5.8% decline, and the stock trades at a forward 12-month price-to-sales ratio of 93.25X versus the industry average of 4.40X.

NEC has decided to halt the development of actual quantum computer hardware, which processes vast amounts of calculations at high speed, by the end of March. The company achieved the world's first superconducting qubit in 1999, establishing itself as a pioneer in the superconducting approach later adopted by Google and IBM. However, due to many challenges such as the lack of a dominant technology for practical use, continuing hardware development was deemed not cost-effective. NEC will continue its research and development leveraging quantum mechanics. In Japan, Fujitsu is currently leading research, and in 2025, it developed one of the world's largest quantum computers in collaboration with RIKEN.

Rigetti Computing reported second-quarter 2026 revenue of US$5.14 million, up from US$1.80 million a year earlier, while its net loss widened to US$52.61 million from US$39.65 million. The company also announced a letter of intent for up to US$100.00 million in U.S. Department of Commerce quantum R&D support. The results highlight Rigetti's growing role in quantum infrastructure for research, AI, and high-performance computing, including new commercial system deliveries with partners such as Nvidia and HPE. The federal R&D support strengthens the short-term catalyst around government-backed scaling but also sharpens the risk of dependence on public funding and rising losses.

Rigetti Computing reported second-quarter 2026 adjusted loss per share of 5 cents, wider than 4 cents a year ago and missing the Zacks Consensus Estimate by 66.7%. Total revenues surged 185.3% year over year to $5.1 million, beating the consensus by 4.68%, driven by growing demand for on-premises quantum computing systems including Novera-based deployments. Gross profit jumped 286.6% to $2.2 million with gross margin expanding roughly 1,120 basis points to 42.6%, but operating loss widened to $28.1 million from $19.9 million as research and development expenses rose 53.3% and selling, general and administrative expenses increased 37.5%. The company ended the quarter with $393.7 million in cash, cash equivalents and short-term available-for-sale investments and no debt, while cumulative net cash provided by operating activities reached $14.9 million versus a use of $369.7 million a year ago.

Wall Street analysts project significant upside for two AI-related stocks, with the most bullish targets implying gains of 218% or more. For SoundHound AI, all four covering analysts rate it a buy, and the average price target of $12.75 suggests about 110% upside from current levels, while H.C. Wainwright's Scott Buck has a $20 target implying roughly 228% upside, citing strong sales growth and a path to positive adjusted EBITDA margins by late 2026. For Rigetti Computing, a quantum computing company tied to AI advancements, six of nine analysts rate it a buy with an average target of $30.71, indicating around 90% upside, and Rosenblatt Securities' John McPeake maintains a $40 target for about 150% upside despite recent insider selling and technology development concerns. Both stocks have declined year to date, with SoundHound AI down 42% and Rigetti Computing down roughly 30%.

Horizon Quantum Computing reported a second-quarter net loss of $115.2 million, compared with a loss of $2.9 million a year earlier, driven largely by a $108 million non-cash charge from the remeasurement of warrant liabilities. The company ended the quarter with $113.3 million in cash, up from $96.6 million at the end of March, after warrant exercises generated $2.7 million during the quarter and approximately $28.7 million to date. Operating expenses rose to $7.2 million from $2.8 million, reflecting headcount growth to 57 full-time employees and increased research spending. Operationally, Horizon launched early access for its Beryllium quantum programming language, opened its Ember-1 superconducting testbed to users, and announced a collaboration with Quantum Machines, while also planning a 256-qubit IonQ testbed for 2027.

IQM Quantum Computers reported its first financial results as a public company, disclosing a total order backlog that surpassed EUR 102.1 million as of August 3, 2026, after adding EUR 33.0 million since June 30. For the first half of 2026, the company posted revenues of EUR 8.9 million and an operating loss of EUR 60.5 million, while its cash balance stood at EUR 309.4 million as of July 2, 2026, inclusive of listing proceeds. IQM initiated full-year 2026 guidance targeting new order intake of EUR 65 million to EUR 75 million and revenues of EUR 42 million to EUR 47 million. Operational highlights included the first US delivery to the Department of Energy's Oak Ridge National Laboratory, a landmark deal to integrate a quantum computer into the LUMI AI Factory supercomputer, and a collaboration with NVIDIA on AI-driven qubit calibration. The company also invested over EUR 40 million to double cleanroom capacity at its proprietary fab, enabling production of up to 30 full-stack quantum computers per year.

Rigetti Computing shares rose 7.7% through 11:50 a.m. ET Monday, lifted by rival D-Wave Quantum's announcement that AT&T will use its annealing quantum computing technology to optimize network operations and by Benchmark analyst David Williams initiating coverage with a buy rating and a $25 price target. AT&T's evaluation of multiple quantum technologies signals potential future opportunities for Rigetti, while Williams emphasized that quantum computing is not a winner-takes-all market and recommended a portfolio approach to investing in the sector. The analyst's price target implies a further 67% upside from the day's gains, though most analysts believe quantum computing companies remain five or more years from profitability.

Nvidia, Microsoft, and Alphabet are positioning themselves as upstream providers to the quantum computing industry, which McKinsey estimates could grow from $1 billion today to $4.4 billion by 2028. Nvidia does not build quantum chips but offers CUDA-Q software and the NVQLink interconnect, already adopted by 17 quantum builders and nine national labs, and stands to benefit from selling classical computing power needed for error correction regardless of qubit type. Microsoft runs the Azure Quantum marketplace, reselling access to hardware from partners like Quantinuum and IonQ, while developing its own Majorana 2 topological chip, which it claims is 1,000 times more reliable than its predecessor. Alphabet’s Google Quantum AI builds superconducting chips such as the 105-qubit Willow processor, which demonstrated exponential error reduction and a computational advantage, and may eventually sell access through Google Cloud. Among the three, Nvidia is identified as the best pick-and-shovel play due to its direct, qubit-agnostic exposure, with Microsoft a close second for its low-risk marketplace model.

IonQ is currently ahead of Rigetti Computing in both technical capabilities and commercial success in the quantum computing race, though both stocks appear overvalued given the early stage of the industry. IonQ reported first-quarter revenue of $64.7 million, a 755% increase year-over-year, and raised its full-year guidance to between $260 million and $270 million, while its remaining performance obligations reached a record $470 million and it held roughly $3.1 billion in cash and investments. Rigetti generated just $4.4 million in first-quarter revenue with $569 million in cash and no debt, and both companies' recent GAAP profits stemmed primarily from noncash accounting adjustments rather than core operations. McKinsey estimates quantum computing could create $1.3 trillion to $2.7 trillion in economic value by 2035, but the producer share of that total is only $60 billion to $100 billion, and timelines for achieving true quantum advantage remain highly uncertain.

Quantum X Labs announced progress on its AI-driven quantum error-correction program, reporting that its transformer-based QECCT decoder outperformed the classical Minimum-Weight Perfect Matching decoder in selected simulated regimes. The company executed its Deep Quantum Error Correction workflow on an NVIDIA GPU in an AWS environment and benchmarked the decoder across controlled toric-code noise configurations. QXL also tested synthetic surface-code configurations modeled on Google's public surface-code geometry, with the QECCT decoder showing stable logical and bit error rates under varying physical error conditions. Future work is expected to extend evaluations to publicly available experimental datasets and refine data pipelines compatible with NVIDIA CUDA-Q QEC frameworks, while the broader roadmap includes planned work with IQCC, a Quantum Machines company, to generate hardware-derived syndrome data on superconducting quantum processing hardware.

IBM has signed a definitive agreement to acquire HRL Laboratories, aiming to expand its quantum computing portfolio by adding HRL's silicon spin qubit expertise. The acquisition focuses on longer-term progress in scalable and fault-tolerant quantum systems, complementing IBM's existing superconducting circuit work. IBM has committed over US$10 billion to quantum initiatives, and this deal signals a willingness to invest in multiple quantum approaches rather than relying on a single technology path. The move adds execution risk around integration and capital discipline, but could strengthen IBM's position against competitors like Alphabet, Microsoft, and Amazon that are also investing in quantum and advanced cloud infrastructure.

D-Wave Quantum and Rigetti Computing are compared as quantum computing investments for 2026. D-Wave reported fiscal 2025 revenue of $24.6 million, a 178.5% increase, with a net loss of $355.1 million, while Rigetti posted revenue of $7.1 million, a 34.3% decline, and a net loss of $216.2 million. D-Wave recently acquired Quantum Circuits Inc. to add gate-model computing to its annealing technology, and it received $100 million in U.S. government funding, whereas Rigetti focuses on modular superconducting processors and faces high customer concentration from government contracts. The author favors D-Wave due to its broader technology platform and government backing, though both companies carry significant risks from ongoing losses and competition.