Is Quantum Computing Inc. (QUBT) Stock a Buy?

Key Points

• QCI’s photonic chips could be more cost-efficient than ion or electron chips.

• But its emerging technology needs to clear a lot of technical hurdles.

• QCI has a lot of growth potential, but it’s valued like a meme stock.

• 10 stocks we like better than Quantum Computing ›

Quantum Computing Inc. (NASDAQ: QUBT), also known as QCI, was once a thinly traded over-the-counter (OTC) stock. But on July 15, 2021, QCI became a publicly listed stock by joining the Nasdaq Capital Market. It opened at $6.60 per share on the first day, but sank to an all-time low of $0.42 on July 1, 2024.

Like many quantum computing stocks, QCI struggled to grow its sales, racked up steep losses, and failed to justify its sky-high valuations. But by Dec. 18, 2024, QCI's stock recovered and set a fresh record high of $25.68. A few green shoots in the quantum computing market drove a stampede of bulls back toward QCI and its industry peers.

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That rally would have turned a $1,000 investment at its all-time low into $61,143. Today, the stock trades at about $15 -- so that same investment would have shrunk to about $35,700. Does that steep pullback represent a buying opportunity, or should investors shun this wildly volatile stock?

QCI's innovative approach to quantum computing

Unlike traditional computers, which store zeros and ones separately in binary bits, quantum computers can store them simultaneously in qubits. That difference allows them to process larger quantities of data at faster rates than their binary counterparts.

However, quantum computers are also larger, more expensive, and prone to make more mistakes than traditional servers and mainframes. To rectify those shortcomings, companies like QCI are developing new ways to process quantum data.

QCI has a catchy name, but it doesn't manufacture quantum systems like IonQ (NYSE: IONQ) or Rigetti Computing (NASDAQ: RGTI). Instead, QCI only develops photonic chips that use particles of light (photons) instead of the more widely used ions and electrons to store quantum information.

IonQ and Rigetti produce ion-powered and electron-powered quantum computing systems, respectively, but both types of systems must be refrigerated at extremely low temperatures. By comparison, photonic chips -- which deliver light through chips, fibers, and optical circuits -- can function normally at room temperatures.

Photonic chips can also be manufactured more easily at conventional chip fabs instead of specialized plants. Those advantages could reduce the costs for quantum computing systems.

Still years away from scaling up its business

QCI's technology sounds promising, but it could be years before it generates significant revenue. It completed the construction of its first foundry in Arizona this March, opened its doors in May, and started fulfilling its first deliveries shortly afterwards. But for now, it's only shipping its chips to a handful of design firms and research institutions.

In the first half of 2025, the fledgling chipmaker only generated $100,000 in revenue as it racked up a net loss of $19.5 million. For the full year, analysts expect it to generate $400,000 in revenue with a net loss of $39.2 million. It ended its latest quarter with $349 million in cash and equivalents, but a significant portion of that total came from a $188 million private placement of its common stock.

In other words, QCI -- which has already increased its number of shares by 448% since its Nasdaq debut -- will keep diluting its investors as long as it keeps bleeding red ink. Meanwhile, its insiders sold more than 12 times as many shares as they bought over the past 12 months.

That might be because QCI still looks grossly overvalued relative to its growth potential. For 2026, analysts expect QCI's revenue to more than quadruple to $1.85 million as its net loss widens to $44 million. But with an enterprise value of $2.4 billion, it's already valued at nearly 1,300 times its projected sales for 2026. That's a meme stock valuation, which could set it up for a steep drop on any negative news.

While QCI might be an early mover in the photonics-driven quantum race, it still faces stiff competition from similar companies like Xanadu and PsiQuantum. It also needs to overcome some major technical bottlenecks for photonic chips -- including the fact that photons can be absorbed or scattered as they pass through more optical components.

QCI's photonic chips have a lot of potential, but they're still far behind ions and electrons in actual quantum computing applications. So for now, I'd keep an eye on QCI and see if more green shoots appear, but I wouldn't rush to buy this stock over IonQ, Rigetti, or other more established quantum players that are already generating meaningful revenue.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.