Quantum Computing Shares Are Up By More Than 70%: Here's What You Need To Know

Quantum Computing Inc. QUBT shares are trading higher today. The company announced its first secured order for thin film lithium niobate (TFLN) photonic chip technology, marking a milestone for its foundry services. Here’s what you need to know.

What To Know: The order was placed by a prominent research and technology institute in Asia and will use Quantam’s (QCi) proprietary TFLN processing expertise, which is important for producing high-performance photonic integrated circuits (PICs) and devices essential for telecom and datacom markets.

The initial photonic chip deliveries for this order are set for December 2024, with completion expected by the first quarter of 2025.

“By integrating TFLN into our own quantum technology, we are able to enhance the precision and performance of our systems, and QCi is proud to play a critical role in the future of integrated photonics. We anticipate additional orders in the coming months as the photonics community continues to embrace TFLN,” stated Dr. Pouya Dianat, director of PICs and Foundry Services at QCi.

QCi also recently signed two memorandums of understanding (MOUs) with industry partners to develop process design kits (PDKs) and photonic chip design services, aligning with the planned opening of the QCi Foundry in Tempe Arizona, in the first quarter of 2025.

Analyst Reaction: Ascendiant Capital analyst Edward Woo reiterated a “Buy” rating for QCi, raising the price target slightly from $8.25 to $8.50.

QUBT Price Action: QCi shares were up 89.12% at $2.61 at the time of publication Wednesday, according to Benzinga Pro.

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Disappointing market reactions followed the June-quarter earnings reports of Tesla TSLA, Alphabet GOOGL, Microsoft MSFT, and Amazon AMZN from 'The Magnificent 7' group, while Apple AAPL and Meta META received more positive feedback. The interpreted downturn may signal tougher times ahead for this elite group, possibly marking the end of their market reign.

Growth Potential Amidst Turbulent Market Sentiments

Despite this, the majority of the 'Mag 7' stocks exhibit robust growth in both revenues and earnings, positioning them as sustainable growth performers in the current market landscape. With most companies showing impressive financial numbers and a positive growth trajectory stretching into the foreseeable future, Amazon's remarkable earnings surge of almost 100% and Alphabet and Microsoft's solid performances reflect the overall positive outlook for these market giants.

Strategic AI Investments and Market Discontent

While the lack of clarity on monetizing significant AI investments has left investors skeptical, the commitment of these companies to enhance AI infrastructure ensures their relevance and leadership in an AI-centric future. Market concerns are primarily due to the perceived ambiguity around the returns on these substantial investments. However, Alphabet's CEO warning about the risks of underinvestment in AI underscores the critical nature of these strategic moves.

Current and Future Growth Expectations

Charts highlighting consensus expectations for the 'Mag 7' stocks portray a promising growth trajectory, with anticipated earnings growth of 33.5%. These projections, combined with a favorable revisions trend in the Technology sector, suggest continued prosperity for key players in the industry.

Insights from Earnings Season and Future Expectations

Recent Q2 earnings reports indicate a positive trend, with S&P 500 members showcasing a notable 11.2% increase in earnings and a resilient 5.5% rise in revenues. As more companies prepare to reveal their financial results, the upcoming reports from industry titans like Disney, Uber, and Shopify will provide further insight into the market's direction.

Historical Context and Future Projections

Examining the historical context of revenue and earnings beats percentages reveals a new low for Q2 revenue beats at 59.2%, emphasizing the unique challenges faced in the current economic landscape. Despite this, the overall outlook remains optimistic, with total S&P 500 earnings expected to climb by 10.5% and revenues by 5.3% from the previous year.

Paving the Way for Future Growth

As the market navigates through uncertain terrains, the strategic investments and growth initiatives undertaken by the 'Magnificent 7' stocks position them favorably for future success. By staying ahead of emerging trends like AI and fostering sustainable growth, these companies are set to maintain their leadership positions in the ever-evolving market landscape.

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Quantum Computing Shares Are Up By More Than 70%: Here’s What You Need To Know – Quantum Computing (NASDAQ:QUBT)