Quantum computing stocks continue to rebound following a Wall Street Journal article yesterday detailing potential U.S. government equity investments in the sector. The report outlined early discussions with the Commerce Dept., where firms could trade shares for at least $10 million each in federal funds.
Named in the piece were IonQ (NYSE:IONQ), Rigetti Computing (NASDAQ:RGTI), D-Wave Quantum (NYSE:QBTS), and Quantum Computing (NASDAQ:QUBT). These talks aimed to strengthen American leadership in quantum tech against international rivals.
The story ignited investor excitement after consecutive days of declining stock prices, with QBTS, RGTI, IONQ, and QUBT all racing higher by double-digit percentages. Hours later, though, a Commerce official pushed back, stating the agency was “not currently negotiating equity stakes with quantum computing companies.”
Rally Rolls On Regardless
The denial did little to dampen enthusiasm. All four stocks closed higher for the day, with most up by single-digit rates, though QBTS closed with an almost 14% gain. The rally is continuing this morning, with the quantum stocks offering a repeat performance as traders seemingly hang their hats on the word “currently” in the official response.
They may be interpreting the denial as a temporary pause rather than a full rejection of negotiations. Some speculate the leak to the Journal might have been a premature disclosure rather than an absence of actual talks.
This resilience ties into quantum’s role as a priority technology. The CHIPS and Science Act of 2022 already allocates billions for quantum research through the National Science Foundation, including programs to expand quantum users and build a skilled workforce. Commerce officials have signaled interest in redirecting CHIPS funds to quantum projects, much like the $9 billion Intel (NASDAQ:INTC) deal that secured a 10% government stake.
Such moves underscore a strategy to safeguard supply chains and innovation from foreign threats, especially China.
Washington’s Equity Playbook
The federal government has increasingly turned to equity stakes in strategic sectors, a tactic once limited to crises. During the 2008 financial downturn, it took significant stakes in important companies, such as General Motors (NYSE:GM) and Citigroup (NYSE:C) as part of bailouts to save them from bankruptcy.
Under the current administration, this approach has expanded. The Intel investment locked in domestic chip production amid U.S.-China tensions. The Defense Dept. followed with stakes in rare earth miner MP Materials (NYSE:MP) and metals producer Trilogy Metals (NYSEAMEX:TMQ), while the Energy Dept. invested in Lithium Americas (NYSE:LAC) for battery materials. Even in steel, a “golden share” gave the government veto rights over U.S. Steel‘s sale to Nippon Steel, ensuring national interests retained their primacy..
Quantum fits this pattern well. Its applications in unbreakable cryptography, faster drug development, and complex AI optimization could shift global balances. Officials classify it alongside semiconductors and rare earths as a “critical industrial” domain where any lag by the U.S. could prove costly.
Prior interventions in energy during wars or airlines after 9/11 show a consistent playbook: step in to protect and propel key industries. It’s not something to be encouraged, but it’s not unprecedented.
Quantum’s High-Stakes Lineup
If equity stakes materialize, the four companies could accelerate toward commercial breakthroughs, though their technologies set them apart.
IONQ’s trapped-ion qubits enable precise control, and it just achieved a major technical milestone by unlocking 99.99% fidelity in two-qubit gates — a new world record. It could make quantum computing systems cheaper to produce, more stable in operation, and far easier to scale up.
The other players also lead in their niches: RGTI focuses on superconducting qubits for hybrid quantum-classical setups, suited to immediate optimization tasks; QBTS specializes in quantum annealing for logistics and scheduling puzzles; while QUBT’s room-temperature photonic chips promise lower costs and easier deployment. JPMorgan‘s recent $1.5 trillion national security push includes up to $10 billion earmarked for investments in quantum computing and related technologies, adding to sector momentum.
Road to Quantum Supremacy
Government involvement could also slash reliance on venture capital, fast-tracking R&D and solidifying the U.S’s. edge over China’s own quantum advances. For these firms, the buzz highlights their place in a public-private push. IONQ and RGTI may lead due to their versatility, QBTS for practicality, and QUBT for its innovation potential.
If these negotiations do materialize, investors will eye quantum computing not as hype, but as the next frontier in computing power. Traders are taking the Journal’s report as an inevitability, as the Commerce Dept.’ “currently” statement leaves room for future action.
Considering the lofty valuations these stocks carry, I’m not sure investors should rush in. “No” might just mean no. And whatever the long-term promise is for quantum computing, QBTS, IONQ, RGTI, and QUBT haven’t earned their current multiples.
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