Shares of Quantum Computing (QUBT 15.81%) are soaring on Friday. The company's stock has jumped 13.9% as of 12:59 ET. The rise comes as the S&P 500 gained 0.9% and the Nasdaq Composite gained 1.1%.
The quantum computing company's stock received a price target upgrade a few weeks after a mostly positive earnings report.
Quantum gets an upgrade
Analysts at Ascendiant Capital Markets raised their price target on Quantum Computing's stock from $14.00 to $22.00 and maintained their buy rating. The stock is currently trading just above $13, so the new price target represents a significant upside.
Quantum Computing reported a mostly positive quarter
Quantum Computing reported Q1 earnings near the end of May, revealing a net gain of $0.11 per share, a big jump from last year's $0.08 in the same period. However, investors should note that much of this gain was a matter of accounting, not a material improvement in its business. 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."
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Operationally, the company does appear to be on the right track, having completed construction of its quantum photonic chip foundry in Tempe, Arizona, a major step.
Don't get ahead of yourself
Quantum is an exciting field that has garnered a lot of press recently, but the truth is, the technology is in its absolute infancy. It could be decades before real commercialization of the technology is possible. It's critical for investors to keep this in mind. Quantum Computing reported just $39,000 in revenue last quarter. Despite this essentially nonexistent revenue, the company has a market capitalization nearing $2 billion.
That is too big a disparity for my taste. Other quantum stocks may be more worth your time at the moment, but note that it will be years before this technology has real legs.
