U.S. Government's Major Investment in Quantum Computing
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 56 minutes ago
0mins
Source: Fool
- Government Funding Injection: The U.S. Department of Commerce has signed letters of intent to provide approximately $2.01 billion to nine quantum companies, with the government taking minority, non-controlling equity stakes, indicating strong support for the quantum computing sector and potentially accelerating technological advancements.
- Significant Gains for IBM: International Business Machines (IBM) is set to receive $1 billion to build a quantum chip foundry in Albany, New York, matching that with another billion of its own, bringing the total project cost to nearly $2 billion, reflecting its long-term commitment to quantum computing.
- Surge in Smaller Quantum Firms: Smaller quantum companies like D-Wave Quantum, Rigetti Computing, and Infleqtion saw stock prices soar over 30% following the announcement, collectively adding nearly $5 billion in market value, despite their weak financial performance, highlighting the speculative nature of the quantum technology market.
- Risks and Opportunities: While the government's funding commitment could bring long-term growth potential to the quantum computing industry, significant risks remain, and investors should tread carefully, especially since these funding agreements are still in the proposal stage.
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Wall Street analysts forecast IBM stock price to rise
16 Analyst Rating
11 Buy
4 Hold
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Moderate Buy
Current: 253.840
Low
210.00
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315.80
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375.00
Current: 253.840
Low
210.00
Averages
315.80
High
375.00
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International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
U.S. Government's Major Investment in Quantum Computing
- Government Funding Injection: The U.S. Department of Commerce has signed letters of intent to provide approximately $2.01 billion to nine quantum companies, with the government taking minority, non-controlling equity stakes, indicating strong support for the quantum computing sector and potentially accelerating technological advancements.
- Significant Gains for IBM: International Business Machines (IBM) is set to receive $1 billion to build a quantum chip foundry in Albany, New York, matching that with another billion of its own, bringing the total project cost to nearly $2 billion, reflecting its long-term commitment to quantum computing.
- Surge in Smaller Quantum Firms: Smaller quantum companies like D-Wave Quantum, Rigetti Computing, and Infleqtion saw stock prices soar over 30% following the announcement, collectively adding nearly $5 billion in market value, despite their weak financial performance, highlighting the speculative nature of the quantum technology market.
- Risks and Opportunities: While the government's funding commitment could bring long-term growth potential to the quantum computing industry, significant risks remain, and investors should tread carefully, especially since these funding agreements are still in the proposal stage.
See More
U.S. Commerce Department Allocates $2 Billion to Quantum Companies
- Funding Scale: The U.S. Commerce Department signed letters of intent to provide approximately $2 billion to nine quantum companies, with IBM set to receive $1 billion for a new quantum chip foundry, indicating strong government backing for the quantum computing sector.
- Market Reaction: Following the announcement, IBM's stock surged about 12%, while smaller quantum firms like D-Wave Quantum, Rigetti Computing, and Infleqtion saw their shares rise over 30%, reflecting investor optimism about the future of quantum technology.
- Quantum Technology Outlook: IBM plans to match the government funding with an additional $1 billion investment to advance its quantum chip foundry in Albany, New York, which is expected to accelerate its long-term strategic roadmap in quantum computing.
- Risks and Opportunities: Despite the significant stock price increases, the financial performance of quantum companies remains weak, with D-Wave reporting only $2.9 million in revenue for Q1, highlighting the high-risk nature of these investments and the need for cautious evaluation of potential returns versus risks.
See More
Global Companies Increase In-House Work in India
- Significant In-Housing Trend: Global companies are increasingly bringing core functions such as engineering, product development, and analytics in-house at their India cost centers, reflecting a reduced reliance on outsourcing, particularly as AI boosts productivity.
- Daimler's Strategic Shift: Daimler Truck's innovation center in Bengaluru is shifting the development of core software and performance-critical algorithms in-house, emphasizing the direct impact of software on vehicle performance and safety, thereby enhancing its competitive edge.
- AI-Driven Efficiency Gains: IBM has stated that automation allows the company to accomplish much more with the same number of employees, indicating a growing importance of internal teams as companies move up the value chain.
- Trend Towards Internal Talent Investment: Catalyst Brands' managing director noted that most companies in the market are increasing investments in internal talent to enhance capabilities, and while outsourcing remains, strategic ownership is gradually shifting towards in-house operations.
See More
IBM Signs Five-Year Agreement to Upgrade Motorway Infrastructure
- Infrastructure Upgrade: IBM has signed a five-year agreement with motorway authorities to comprehensively update the technological infrastructure, aimed at enhancing traffic management efficiency and safety.
- Long-Term Partnership: This agreement signifies IBM's ongoing investment in public infrastructure, which is expected to provide a stable revenue stream and strengthen its competitive position in the smart transportation solutions market.
- Innovative Technology Deployment: The agreement will involve the application of the latest cloud computing and data analytics technologies, which are anticipated to significantly improve real-time monitoring and data processing capabilities for road operations, thereby optimizing traffic flow and reducing congestion.
- Strategic Market Expansion: Through this collaboration, IBM not only solidifies its leadership position in traffic management but also lays the groundwork for similar projects in other cities and countries, further expanding its market share.
See More
IBM Partners with Abertis for Five-Year Digital Transformation
- Digital Transformation Partnership: IBM has signed a five-year global agreement with Abertis to enhance system scalability and reliability through migration to SAP S/4HANA, supporting Abertis's digital transformation across Spain, France, the UK, Chile, and Puerto Rico.
- System Modernization Goals: The agreement encompasses a comprehensive evolution of systems including user management, high-volume transaction processing, and incident management, ensuring high levels of security and performance to meet increasing user demands in multi-country operations.
- User Experience Enhancement: IBM will assist Abertis in developing web portals and mobile applications for end-users, streamlining account, vehicle, and payment management, while providing quick and secure trip viewing and payment functionalities, thereby enhancing user experience and service reliability.
- Governance and Delivery Model: IBM Consulting will provide consulting, implementation, and technology management services under a joint governance model, establishing success metrics and quality standards to minimize business disruption and ensure long-term stability of critical systems.
See More
U.S. Government Invests Over $2 Billion in Quantum Computing
- Government Investment Plan: The U.S. government plans to provide over $2 billion in incentives and investments to quantum computing companies under the CHIPS and Science Act, including equity stakes in several firms, highlighting its commitment to boosting domestic chip manufacturing.
- IBM Quantum Foundry: IBM's startup Anderon will receive $1 billion in government incentives, with IBM matching that amount and contributing intellectual property, marking the establishment of the country's first pure-play quantum foundry, which is expected to enhance domestic quantum computing manufacturing capabilities.
- GlobalFoundries Expansion: GlobalFoundries signed a letter of intent to receive $375 million in incentives to expand its Quantum Technology Solutions business, with the government taking about a 1% equity stake, thereby strengthening its competitive position in the quantum manufacturing sector.
- Absence of IonQ: Despite IonQ's strong performance in quantum computing and its acquisition of SkyWater Technology, it was notably excluded from government investments, which may impact its market position, although its technology leads in accuracy with a record 99.99% two-qubit gate fidelity.
See More
U.S. Government's Major Investment in Quantum Computing
- Government Funding Injection: The U.S. Department of Commerce has signed letters of intent to provide approximately $2.01 billion to nine quantum companies, with the government taking minority, non-controlling equity stakes, indicating strong support for the quantum computing sector and potentially accelerating technological advancements.
- Significant Gains for IBM: International Business Machines (IBM) is set to receive $1 billion to build a quantum chip foundry in Albany, New York, matching that with another billion of its own, bringing the total project cost to nearly $2 billion, reflecting its long-term commitment to quantum computing.
- Surge in Smaller Quantum Firms: Smaller quantum companies like D-Wave Quantum, Rigetti Computing, and Infleqtion saw stock prices soar over 30% following the announcement, collectively adding nearly $5 billion in market value, despite their weak financial performance, highlighting the speculative nature of the quantum technology market.
- Risks and Opportunities: While the government's funding commitment could bring long-term growth potential to the quantum computing industry, significant risks remain, and investors should tread carefully, especially since these funding agreements are still in the proposal stage.
See More
U.S. Commerce Department Allocates $2 Billion to Quantum Companies
- Funding Scale: The U.S. Commerce Department signed letters of intent to provide approximately $2 billion to nine quantum companies, with IBM set to receive $1 billion for a new quantum chip foundry, indicating strong government backing for the quantum computing sector.
- Market Reaction: Following the announcement, IBM's stock surged about 12%, while smaller quantum firms like D-Wave Quantum, Rigetti Computing, and Infleqtion saw their shares rise over 30%, reflecting investor optimism about the future of quantum technology.
- Quantum Technology Outlook: IBM plans to match the government funding with an additional $1 billion investment to advance its quantum chip foundry in Albany, New York, which is expected to accelerate its long-term strategic roadmap in quantum computing.
- Risks and Opportunities: Despite the significant stock price increases, the financial performance of quantum companies remains weak, with D-Wave reporting only $2.9 million in revenue for Q1, highlighting the high-risk nature of these investments and the need for cautious evaluation of potential returns versus risks.
See More
Global Companies Increase In-House Work in India
- Significant In-Housing Trend: Global companies are increasingly bringing core functions such as engineering, product development, and analytics in-house at their India cost centers, reflecting a reduced reliance on outsourcing, particularly as AI boosts productivity.
- Daimler's Strategic Shift: Daimler Truck's innovation center in Bengaluru is shifting the development of core software and performance-critical algorithms in-house, emphasizing the direct impact of software on vehicle performance and safety, thereby enhancing its competitive edge.
- AI-Driven Efficiency Gains: IBM has stated that automation allows the company to accomplish much more with the same number of employees, indicating a growing importance of internal teams as companies move up the value chain.
- Trend Towards Internal Talent Investment: Catalyst Brands' managing director noted that most companies in the market are increasing investments in internal talent to enhance capabilities, and while outsourcing remains, strategic ownership is gradually shifting towards in-house operations.
See More
IBM Signs Five-Year Agreement to Upgrade Motorway Infrastructure
- Infrastructure Upgrade: IBM has signed a five-year agreement with motorway authorities to comprehensively update the technological infrastructure, aimed at enhancing traffic management efficiency and safety.
- Long-Term Partnership: This agreement signifies IBM's ongoing investment in public infrastructure, which is expected to provide a stable revenue stream and strengthen its competitive position in the smart transportation solutions market.
- Innovative Technology Deployment: The agreement will involve the application of the latest cloud computing and data analytics technologies, which are anticipated to significantly improve real-time monitoring and data processing capabilities for road operations, thereby optimizing traffic flow and reducing congestion.
- Strategic Market Expansion: Through this collaboration, IBM not only solidifies its leadership position in traffic management but also lays the groundwork for similar projects in other cities and countries, further expanding its market share.
See More
IBM Partners with Abertis for Five-Year Digital Transformation
- Digital Transformation Partnership: IBM has signed a five-year global agreement with Abertis to enhance system scalability and reliability through migration to SAP S/4HANA, supporting Abertis's digital transformation across Spain, France, the UK, Chile, and Puerto Rico.
- System Modernization Goals: The agreement encompasses a comprehensive evolution of systems including user management, high-volume transaction processing, and incident management, ensuring high levels of security and performance to meet increasing user demands in multi-country operations.
- User Experience Enhancement: IBM will assist Abertis in developing web portals and mobile applications for end-users, streamlining account, vehicle, and payment management, while providing quick and secure trip viewing and payment functionalities, thereby enhancing user experience and service reliability.
- Governance and Delivery Model: IBM Consulting will provide consulting, implementation, and technology management services under a joint governance model, establishing success metrics and quality standards to minimize business disruption and ensure long-term stability of critical systems.
See More
U.S. Government Invests Over $2 Billion in Quantum Computing
- Government Investment Plan: The U.S. government plans to provide over $2 billion in incentives and investments to quantum computing companies under the CHIPS and Science Act, including equity stakes in several firms, highlighting its commitment to boosting domestic chip manufacturing.
- IBM Quantum Foundry: IBM's startup Anderon will receive $1 billion in government incentives, with IBM matching that amount and contributing intellectual property, marking the establishment of the country's first pure-play quantum foundry, which is expected to enhance domestic quantum computing manufacturing capabilities.
- GlobalFoundries Expansion: GlobalFoundries signed a letter of intent to receive $375 million in incentives to expand its Quantum Technology Solutions business, with the government taking about a 1% equity stake, thereby strengthening its competitive position in the quantum manufacturing sector.
- Absence of IonQ: Despite IonQ's strong performance in quantum computing and its acquisition of SkyWater Technology, it was notably excluded from government investments, which may impact its market position, although its technology leads in accuracy with a record 99.99% two-qubit gate fidelity.
See More
