Why Does Quantum Computing Stock Keep Going Up?
Key Points
The U.S. Department of Commerce award $2 billion in grants to quantum computing companies.
It will award $0 of grants to Quantum Computing Inc.
Yesterday, as you've probably heard, The Wall Street Journal reported on a Trump Administration plan to award $2 billion in grants to nine quantum computing companies -- none of which is named Quantum Computing (NASDAQ: QUBT).
It's perhaps unsurprising that the company named "Quantum Computing" still got caught up in the quantumania yesterday. Indeed, Quantum stock started moving a day before the announcement, then rocketed higher yesterday -- and higher again today.
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Up 15.6% through 11:50 a.m. Friday, Quantum shares have gained 44% in three days of trading. But does it make sense that one of the only quantum computing stocks to not win a grant is going up right alongside all the quantum computing stocks that did?
Image source: Getty Images.
Now it's official
Maybe... if there was a typo in the Journal article? Maybe... if someone simply forgot to mention that Quantum Computing got its own contract, too?
Except that didn't happen.
Shortly after WSJ broke the story, the Department of Commerce confirmed the list of winners. Operating under the CHIPS and Science Act, Commerce will "support and accelerate critical research and manufacturing of technologies for the quantum ecosystem," awarding foundry contracts to Globalfoundries (NASDAQ: GFS) and International Business Machines (NYSE: IBM), and quantum technology contracts to "Atom Computing," "Diraq," "PsiQuantum," "Quantinuum," D-Wave Quantum (NYSE: QBTS), Infleqtion (NYSE: INFQ), and Rigetti Computing (NASDAQ: RGTI).
But again, not a penny for Quantum Computing Inc.
What does this mean for Quantum Computing stock?
Most grants were for $100 million, enough to give Quantum Computing two years of runway before it runs out of money -- if it had won a grant. Without a grant, Quantum Computing must continue burning its own cash at a rate of more than $42 million per year.
This is bad news, not good news, for Quantum Computing stock.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends GlobalFoundries and International Business Machines. The Motley Fool has a disclosure policy.