Other than artificial intelligence (AI), few sectors have seen a more meteoric rise over the past year than quantum computing. Quantum computers are expected to be a significant advancement from the traditional computer, with much more complex technology. Instead of using bits, the smallest form of digital data, quantum computers rely on qubits, which can house much more data than bits and have much higher computing power.
Researchers believe quantum computers have the potential to solve some of the world's biggest issues. That's why quantum computing companies like D-Wave Quantum (QBTS -1.78%), Rigetti Computing (RGTI -1.41%), and IonQ (IONQ 3.36%) have seen their stocks fly, as they continue to make advancements on the technology. D-Wave and Rigetti are up over 1,800% over the past year, while IonQ is up over 500%.
These stocks are still not generating significant revenue and are still losing money, while trading at multibillion-dollar market caps, so I think they will continue to be volatile and investors should keep positions smaller and more speculative for the time being. But here are two government initiatives that could propel the group higher.
The Quantum Benchmarking Initiative (QBI)
The Quantum Benchmarking Initiative (QBI) is being spearheaded by an independent U.S. Department of Defense agency called The Defense Advanced Research Projects Agency (DARPA), whose goal is to make sure the U.S. is prepared for technological challenges that might arise. The unit launched in 1957 after Sputnik, which marked the beginning of the space race between the U.S. and the Soviet Union.
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QBI's goal is essentially to determine if a quantum computer can be built to deliver a "utility-scale operation" in which its benefits exceed its cost. QBI hopes to do this by the year 2033. Companies can apply to go through a rigorous three-stage process. In the government's words:
- Stage A: Describe a utility-scale quantum computer concept that has a plausible path to realization in the near term.
- Stage B: Describe a Research and Development Plan capable of realizing the utility-scale quantum computer, the risks associated with that plan and the planned risk mitigation steps, and the prototypes needed to burn down these risks.
- Stage C: Work with the Government to Verify and Validate that their utility-scale quantum computer concept can be constructed as designed and operated as intended.
In early April, DARPA selected 20 quantum computing companies for Stage A, which the agency described as a six-month sprint. Rigetti and IonQ were among those selected for Stage A. D-Wave was not selected because it is not focused on gate model quantum computing, but analysts at Needham believe industry momentum would certainly benefit the company, and I agree. Stage A should be completed some time in October based on the six-month timeline.
Department of Energy Quantum Leadership Act of 2025
U.S. Sen. Richard Durbin, D-Ill., introduced the Department of Energy Leadership Act of 2025 into the Senate in February of this year, and the bill has been referred to the Committee on Energy and Natural Resources.
According to Quantum Insider, the bill would increase research and development (R&D) for quantum information purposes including quantum computing. The bill could authorize as much as $2.5 billion in funding over five years, which would pair nicely with what DARPA is doing, and could further spur the quantum computing movement. The bill also seeks to establish regulations for working with other countries like China on quantum computing, clarify who can receive funding, and provide new goals and priorities for quantum technologies.
Stocks like Rigetti, D-Wave, and IonQ would benefit from passage of this law if investors believe interest is increasing. If the U.S. government views quantum computing as necessary for national defense and solving core problems that impact all of mankind, investors are likely to get more interested.
The bill also appears to have bipartisan support, with co-sponsors from both parties. A similar version of this bill failed to pass Congress in 2024, but now with the support of Schumer, bipartisan support, and the apparent interest from the Trump administration, given that it earmarked $250 million of funding in the "one big, beautiful bill" for quantum tech, the bill may drum up more support this time around.
