Why Quantum Computing Stock Is Skyrocketing Today

Shares of Quantum Computing (NASDAQ: QUBT) are soaring on Friday. The company's stock jumped 34.5% as of 1:32 p.m. ET. The rise comes as the S&P 500 (SNPINDEX: ^GSPC) gained 0.4% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 0.2%.

The quantum computing company reported its Q1 earnings, posting a net profit.

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Quantum Computing was profitable, but look closer

Quantum Computing reported Q1 earnings of $17 million, or $0.11 per share, a major jump from the loss of $6.4 million or $0.08 per share in the year-ago period.

While investors are rewarding the company's shift to profitability, the quarter is likely an aberration. The company attributed the change to "a $23.6 million noncash gain on the mark-to-market valuation of the Company's warrant liability as a result of our merger with QPhoton in June 2022." In other words, it was a function of accounting, not a material change in its business.

There is certainly positive momentum operationally, however. During the quarter, Quantum Computing completed construction of its Quantum Photonic Chip Foundry in Tempe, Arizona, a facility designed to manufacture its specialized photonic chips for quantum computing and communications applications.

Interim CEO Dr. Yuping Huang was optimistic, noting the company is "encouraged by our early traction, which is the first step in what we believe is a significant, multiyear opportunity to serve the expanding markets in datacom, telecom, and quantum-enabled applications."

Image source: Getty Images.

A long way to go

While there are positive developments here, quantum computing is many years away from real viability in commercial applications. It will be a long time before any company is able to produce a solution that is robust, powerful, and stable enough to generate a return on investment.

Quantum Computing's technology shows promise, but it is too early to tell which approach and which companies will succeed. If you are an investor with a particularly high risk tolerance and the ability to wait a decade or more for your investment to pay off, Quantum Computing is a solid addition to your portfolio, but you should look to spread your quantum investment around to many companies in the space.

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Johnny Rice 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.