This Quantum Stock Is Puzzling. Why Its Growth Surge Is Mostly an Illusion.

Quantum Computing Inc. reported $5.6 million in revenue in the second quarter, driven primarily by the acquisition of Luminar Semiconductor in February. (Globe News Wire)

Investment opportunities in quantum computing are expanding, and aptly named Quantum Computing Inc. is one of them. However, a recent bullish call on the stock may reflect optimism for the broader sector rather than company-specific fundamentals.

Ascendant Capital Markets analyst Edward Woo, one of fewer than a dozen analysts following the stock, reiterated a Buy rating while lifting his price target slightly $32 from $30. The stock was trading at $8.46 in premarket trading Thursday, up 1.3%.

The update came on the heels of QCi’s latest quarterly report. The company posted $5.6 million in revenue, narrowly ahead of the $5.2 million analysts had anticipated. Considering QCi logged just $61,000 in revenue in the same period last year, this may seem like a big step.

However, a closer look reveals that nearly all revenue stemmed from the acquisition in February of Luminar Semiconductor, which QCi bought for $100 million after Luminar’s parent company filed for bankruptcy.

Acquisitions are a standard engine for growth in the quantum computing industry, allowing companies to rapidly expand their capabilities and market share. IonQ leads this trend with an aggressive string of purchases, most notably acquiring Oxford Ionics in 2025 to secure proprietary technology that helped it claim a record in quantum performance. Following a similar playbook, D-Wave Quantum acquired Quantum Circuits earlier this year to expand its reach beyond its legacy annealing systems.

However, QCi’s story gets stranger below the surface. It formed 25 years ago as Ticketcart, an online retailer selling remanufactured inkjet cartridges. Six years later, it moved into beverage distribution. In February 2018, the company shifted its registration to Delaware from Nevada and changed its name to Quantum Computing Inc.

This pivot into quantum technology was fully realized through the 2022 acquisition of QPhoton, which allowed QCi to absorb the company’s intellectual property and engineering team while expanding its offerings from software tools to actual quantum systems.

Financial challenges have lingered. As recently as 2024, QCi included a going concern warning in its filings with the Securities and Exchange Commission, raising substantial doubt about its ability to continue operating.

Ascendant’s Woo has been bullish on QCi since launching coverage this June. He’s one of just seven analysts tracking the stock—they have an average rating of Buy on the shares with a price target of $18.67. Woo’s latest call came as the company remains deeply unprofitable. Operating losses more than doubled to $21.8 million in the second quarter, driven partly by acquisition-related transaction expenses.

While QCi’s net loss shrunk to $11.8 million from $36.5 million, most of this improvement stemmed from paper accounting. Last year, the company took a $28 million non-cash loss to revalue financial warrants from the QPhoton deal. The revaluation loss was only $1.7 million in the second quarter.

Woo acknowledged that QCi has just started commercializing its technology. Notably, his bullish call seemed to hinge less on the company itself and more on prospects for the industry at large.

The rapid adoption of technologies like artificial intelligence “has served to exponentially increase the generation of data,” in turn driving up demand for high-performance computing, Woo wrote. Indeed, quantum computers are expected to operate alongside classical machines directly within data centers, and this use case is already being explored.

As quantum hardware itself continues to advance, Woo expects corresponding growth in demand for software, an expected boon to QCi’s flagship software solution, Qatalyst.

His endorsement reflects the boundless optimism of quantum bulls who expect the technology to fundamentally reshape data processing. Unlike classical computers that communicate information in ones and zeros, quantum bits, or “qubits,” can exist as both simultaneously. By harnessing the properties of quantum physics, these systems unlock a richer mathematical landscape to solve previously intractable problems.

QCi’s operations are shrouded in mystery. The company’s primary residence is listed as an office building in New Jersey, but it also operates a so-called foundry—styled in its latest quarterly report as a “chips facility”—at Arizona State University’s Research Park.

The site became operational in May 2025, and management expects to open a second location in “the next several years.” However, short-seller firm Iceberg Research twice alleged the company’s operations were no more than a “smoke screen,” saying the space wasn’t large enough to support a full-fledged foundry. Another short seller, Capybara Research, subsequently accused the company of exaggerating its ties to NASA and fabricating revenue.

QCi hasn’t addressed the allegations publicly, nor has it responded when approached for comment by Barron’s. However, the company has vowed to “vigorously defend itself” against similar claims raised in a federal class action lawsuit.

The company’s 2018 rebrand appears to be little more than an effort to capitalize on the growing hype around an emerging technology. In 2017 — considered by some to be the year quantum would break out of the lab — the discourse centered on qubit counts, system scale, and proof-of-concept demonstrations.

At the same time, quantum computing companies are magnets for criticism. Despite growing government interest and investment, the technology remains in its infancy, and investors may grow impatient with meager revenues alongside expanding losses. Even those seen as technical leaders like Quantinuum have yet to win Wall Street’s trust, as shares fizzled in their June trading debut.

As a smaller public player lagging many of its rivals in commercialization, QCi faces a higher bar. Woo forecasts “strong revenue growth” in the next year to be a positive for the stock. But strength is relative, and for a company that has yet to convince the broader industry it can compete these gains may not be enough.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

Copyright ©2026 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8