Saharsh's Blogs

Quantum Computing Inc (QUBT) is a quantum computing firm(as the name bluntly suggests) which is making massive waves in the stock market. With their $2.3 billion market cap and 2,547.62% growth over the last year, they seem to be poised as leaders in the quantum computing industry. In my report I’ll go over various aspects of the company and try to give you my valuation on whether or not this is an opportune time to invest in this exciting company.

Stock performance comparison over last year

Let’s start with basic finances. QUTB’s growth rate seems impressive, but let’s compare it with other competitors in the field. 

Starting out with the cash flow. Outside FormFactor, most of these companies remain in the red, struggling to get into positive cash flow. Regardless, across all companies that saw a negative cash flow QUBT had the highest increase in their stock value. The general increase in investment into the quantum computing industry has boosted the values of most of these stocks you see on screen here. Similarly to the AI craze, the quantum computing industry seems to be going through a craze of its own right now. This pretty much spells out danger to investors, as in a bubble like this it’s definitely dangerous to invest in the industry, but let’s dive deeper into specifics about QUBT to figure out if it holds more of a promise over these other companies.

An introduction to the inner workings of QUBT and their competitors

Quantum Computing Inc. (QUBT) operates in the photonic quantum computing space, but distinguishes itself with a dual business model centered on their unique Thin-Film Lithium Niobate (TFLN) technology. Its most direct competitors are other companies developing photonic quantum computers, such as PsiQuantum and Xanadu Quantum Technologies.

QUTB’s biggest advantage is that it has an explicit focus on TFLN as a material platform and its proprietary TFLN photonic chip foundry, which uniquely offers external commercial foundry services. 

In contrast, PsiQuantum, while also focused on photonic quantum computing, emphasizes silicon photonics and aims for fault-tolerant, utility-scale machines, leveraging a strategic partnership with a major established semiconductor foundry, GlobalFoundries, for mass production. 

Xanadu Quantum Technologies also utilizes photonic quantum computing, specifically with a focus on continuous-variable quantum computing using squeezed states of light on silicon photonic chips.

Lets address the difference in each company’s chip types. QUBT’s TFLN chips are highly efficient and very fast at modulating light which is essential for controlling quantum states in photonic quantum computers. On the other hand, silicon photonics are significantly cheaper and easier to produce, but lack the light modulation property that TFLN chips have. This makes the silicon chips slower, take more power, and have worse integration in comparison to the TFLN chips. 

This difference shows the superiority of TFLN chips over silicon chips. IN the short run, PsiQuantum and Xanadu Quantum Technologies might generate more cash flow, but as TFLN chips become less expensive to produce over time, QUBT will surpass them. 

In total QUBT’s unique position makes it seem like the diamond we are looking for, but lets take one final look at the company’s leadership before we get to the final verdict.

Management Analysis

Even with their current position, QUBT needs a solid leadership and board of directors to set it up for success. 

Let’s start with their internal leadership. First of all their CEO, Dr. Yuping Huang has over 20 years of industry experience in quantum computing and was the founder of QPhoton Inc., which QUBT acquired in June 2022. He has pulled in large amounts of funding (over $40 million) for QUBT. With a 15% stake in the company, he has a reason to push this company to success, and I for one believe he can.

QUBT’s board of directors is also composed of similarly competent individuals. With over 150 years of experience in the board, they have the industrial knowledge to help guide Dr. Yuping Huang and the company to success.

Final Verdict

So with all of the facts out of the way, how do I feel overall abou QUBT? I think this company is an easy addition to my portfolio, and if you don’t have it in yours, I suggest you add it soon. This company is a leader in what they do, and their unique chips and the recent establishment of their chip factory puts them in a position to succeed well into the future.

Also, a little tidbit of info that proves the potential of this company lies in their current investors. QUBT is full of big name investors such as Vanguard Group Inc.; BlackRock, Inc.; Morgan Stanley; State Street Corp.; Geode Capital Management, LLC; UBS Group AG; Citadel Advisors LLC; Goldman Sachs Group Inc.; and Millennium Management LLC. The recognizable investors bring merit to QUBT, so if you don’t believe me, maybe believe them.

With all that said, I hope you all enjoyed my first report and learned something valuable from it. I hope to pump out more reports like these maybe once every week or two about companies that I find interesting. Remember this isn’t any official financial advice, but rather my thoughts about the industry. Let me know if you have any suggestions or advice on how to improve my reports, or even if you have any companies you would like me to look into next. Thank you for reading!