Quantum Computing Inc. Stock: Why QUBT Skyrocketed Yesterday

Investment Thesis
Quantum Computing Inc. (NASDAQ:QUBT) stock soared yesterday, surging by 33% in early trading following the announcement of a significant contract with NASA's Goddard Space Flight Center. This news has fueled investor optimism about the company's role in the future of quantum technology. However, it's essential to consider the fundamentals and potential challenges before making an investment decision.



NASA Contract Drives QUBT Stock Higher
On Tuesday, December 17, 2024, Quantum Computing Inc. (QUBT) announced that it had received a contract from NASA to support phase unwrapping using its Dirac-3 photonic optimization solver. This contract marks a critical milestone for the company, as it highlights the potential of its quantum optimization technology in addressing complex computational challenges. The news sent QUBT stock soaring by 33% in early trading, reaching a new 52-week high.

Why Did QUBT Stock Surge?
The recent rally in QUBT stock can be attributed to several factors:

1. NASA Contract: The contract with NASA is a significant win for QUBT, as it brings in new revenue and validates the company's technology. This contract demonstrates the real-world applications of QUBT's Dirac-3 entropy quantum optimization machine, which can address complex optimization and computational challenges.
2. Growing Interest in Quantum Computing: The broader quantum computing industry has experienced a surge in interest and investment, driven by technological advancements and a promising industry outlook. This has fueled a frenzy in the quantum computing market, with QUBT's stock price reaching new 52-week highs.
3. Technological Advancements: QUBT's proprietary thin film lithium niobate (TFLN) processing expertise is a game-changer in the world of photonics. TFLN is used to fabricate advanced optical devices and photonic engines, which are essential for a range of applications, from quantum communications to high-speed data transfer in telecommunications. This technological advantage has positioned QUBT as a leader in the rapidly growing markets of coherent communication and data communication.

Is QUBT Stock A Good Long-Term Investment?
While the recent rally in QUBT stock is impressive, it's important to approach this burgeoning field with a balanced perspective. The technology, though promising, is still in its nascent stages, and several challenges remain. Quantum computing faces significant technical hurdles, including error correction and the development of reliable quantum systems. These hurdles must be overcome to realize the full potential of quantum technology.



Moreover, QUBT is a high-risk, high-growth potential story, with various factors at play, including technological improvements and costs. The company could potentially sell several quantum computers in the coming years, which may continue to drive its stock higher. However, the losses remain a key factor. In 2023, QUBT reported an operating loss of $25 million in the last twelve months.

Is QUBT Stock A Buy, Sell, Or Hold?
QUBT stock is a hold. We recommend that investors who added exposure at its recent lows sell into the current rally. There are numerous opportunities in the quantum computing space with established scale, customer bases, and less volatility. While QUBT's recent contract with NASA is a significant achievement, investors should consider the risks and challenges associated with investing in emerging technologies.