Copyright Investor's Business Daily
Quantum computing stocks continue to be volatile heading into third-quarter earnings reports. The companies are still unprofitable for the most part as they aim to advance the technology. IonQ (IONQ) reports earnings after the market close on Wednesday. Meanwhile, D-Wave Quantum (QBTS) reports early on Nov. 6. Rigetti Computing (RGTI) reports on Nov. 10, with Quantum Computing (QUBT) due on Nov. 14. The Department of Energy on Tuesday announced $625 million in funding to renew five quantum research centers established under the first Trump administration. Each research center will receive $125 million in funding over the next five years. They include quantum centers at Brookhaven National Laboratory, Fermi National Accelerator Laboratory, Argonne National Laboratory, Lawrence Berkeley National Laboratory and Oak Ridge National Laboratory. IonQ has partnered with Oak Ridge. IonQ Acquisition Spree Also, there's been speculation that the Trump administration could take stakes in quantum computing companies. Quantum computing stocks have pulled back after hitting all-time highs in mid-October. IonQ stock, for example, hit a record high of 84.64 on Oct. 13. Wall Street analysts expect IonQ to report a loss of 44 cents per share, widening its loss from 26 cents a year earlier amid the company's acquisition spree. Also, IonQ revenue is expected to grow 118% to $27 million. Traditional computers use electronic circuits to store information as digital zeros and ones. Instead, quantum machines rely on processors known as "qubits." When atom-based qubits link with other qubits, it's a physics process called entanglement. In Q3 financial results, investors will be focused on revenue growth for quantum computing stocks. In some cases, they will also be looking for smaller losses. D-Wave Earnings Due While D-Wave turned profitable on an adjusted basis in the March quarter on a one-time revenue pop, it's expected to record a 6-cent loss in Q2, narrowing from a 10-cent loss a year earlier. D-Wave revenue is expected to grow 62% to $3 million. D-Wave on Monday announced that one of its quantum computers is "operational" at defense firm Davidson Technologies in Huntsville, Ala. Davidson holds an option to purchase a quantum system. Further, D-Wave and Davidson are exploring quantum use cases in areas such as radar detection, resource deployment, military logistics optimization artificial intelligence and materials science. Quantum computing works on a subatomic level and uses exotic technologies, like supercold superconductor chips. Further, quantum computing aims to solve problems too complex for today's classical computers, such as simulating chemical reactions. Other applications are expected in material design. Join IBD Live For Stock Ideas Each Morning Before The Open D-Wave stands out as the chief developer of one flavor of quantum technology. Founded in 1999 by researchers from the University of British Columbia in Canada, the company pioneered the process called "quantum annealing." Further, Rigetti is expected to post a 5-cent loss in Q3, improving from an 18-cent loss a year earlier. But the company's revenue will dip 9% to $2.2 million, analysts predict. Lastly, Quantum Computing is expected to post a 6-cent loss per share, the same as a year earlier, with revenue rising 16% to $100 million. Quantum Computing Stocks Volatile In 2025 Meanwhile, a basic options trading strategy around earnings — using call options — allows investors to buy a stock at a predetermined price without taking a lot of risk. Quantum computing stocks have been volatile amid uncertainty over commercialization and competition from tech industry giants. Cisco Systems (CSCO), for example, is pushing into quantum networking, taking on IonQ and others. Nvidia (NVDA) has offered differing views. Also, quantum computing stocks sometimes appear to trade in sympathy with speculative artificial intelligence infrastructure stocks. In 2025, D-Wave stock has advanced 341% as of Oct. 31. Shares in IonQ are up 49%. Shares in Rigetti have advanced about 190%. Quantum Computing is about flat. Also, Nvidia's long-range strategy recently again spooked quantum investors. Nvidia stock has gained 46% in 2025. Xanadu To Go Public In Space Deal Further, photonic quantum computing firm Xanadu on Monday announced plans to go public via a SPAC deal with Crane Harbor Acquisition Corp. (CHAC), that will value the combined company at $3.6 billion. IonQ, Rigetti and D-Wave went public via the SPAC route in 2021 and 2022. The Xanadu transaction is targeted to close in early 2026. Canada-based Xanadu expects the SPAC deal to garner nearly $500 million, including a $275 million private investment in public equity. Special purpose acquisition companies, or SPACs, have been controversial. SPACs raise money in an initial public offering with the purpose of acquiring a company or companies. According to a recent Citi report: "Xanadu is building quantum computers using photonics. Xanadu cites six core advantage of using photonics: room temperature computation, manufacturability, error correction flexibility, modularity, networkability, fasts clock speeds, and telecom compatibility. As for hardware, Xanadu offers the X-Series, which the company states is the first photonic quantum computer to be deployed to the cloud. The company believes that its architecture is suitable and capable of scaling to one million qubits through optical networking." Quantum Stocks Have Very High ATRs Meanwhile, investors should pay attention to the average true range metric of quantum computing stocks. Available on IBD MarketSurge, the average true range gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves. IBD suggests buying stocks with ATRs of up to 8%. The IBD Methodology: How To Invest In Stocks While Managing Risks As it stands, IonQ has an ATR rating of 9.67%, the lowest among quantum computing stocks. Rigetti's ATR rating comes in at 13.21%, while D-Wave's is 14.02%. Quantum Computing's ATR rating also is high at 11.84%. Follow Reinhardt Krause on X, formerly Twitter, @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing. YOU MAY ALSO LIKE: AI Stocks Dispel Bubble Talk. Capital Spending Is Booming, With No End In Sight. Want To Trade Options? Try Out These Strategies Monitor IBD's "Breaking Out Today" List For Companies Hitting New Buy Points Build Custom Stock Screens With MarketSurge
