Quantum stocks take flight on AI hype

Welcome to AI Collision 💥,

In today’s collision between AI and our world:

• The DoE is helping heat up quantum
• Takeovers galore
• AI, QCs, where are the big ones hiding?

If that’s enough to get the quantum particles tangling, read on…

AI Collision 💥

The quantum computing market is heating up in a way that feels eerily like early crypto or cloud.

This week the U.S. Department of Energy (DOE) rolled out a new “Quantum-in-Space” push with IonQ, Honeywell and EPB as lead partners.

The aim?

“…accelerating commercialization, demonstrating applications like secure quantum communications, advanced quantum position navigation and timing, and quantum sensing, and expanding America’s role in the space economy”

Clearly winning the “space race” is an important part of the current U.S. administration’s grand plans.

I tend to think they see it as a national security advantage to dominate space, and if they can do that with leading quantum technologies, that’s a bonus win.

But that’s not the only activity in the quantum market that’s sent the prices of some of the quantum pure-plays shooting higher.

IonQ has gone full M&A shark. Over the past year it’s picked up Qubitekk, Lightsynq, and just closed a massive $1.1 billion buy of Oxford Ionics in the UK.

The timing of the Oxford Ionics deal I don’t think is a cooincidence either. Quite nicely timing with the current state visit of Trump to the UK.

Seems unlikley that one of the most U.S. government entrenched quantum companies, randomly announces the acquisition of one of the UK’s most advanced quantum research companies in the same week the U.S. President is visiting the UK.

Politics aside, each acquisition by IonQ plugs a gap, photonic links, quantum memories, ion-trap patents, quantum research.

And then to top all this off they’re also acquiring Vector Atomic. This deal ties them in with the government further as Vector technology is already used in federal and national security applications.

CEO Niccolo de Masi says the aim is a two-million-qubit system by 2030. And investors are lapping it up — IonQ stock has surged 50% in a week, hitting $69 after UK regulators signed off on the Oxford deal and the Vector announcement dropped.

It’s also not all IonQ moving and shaking up the market.

Rigetti signed a partnership with India’s supercomputing agency, C-DAC, to build hybrid quantum–classical systems.

Investors loved this deal too and Rigetti is up 35% in a week.

But one of the biggest deals in quantum is Oxford Quantum Circuits teaming up with Nvidia and Digital Realty to open a “Quantum-AI” data centre facility in New York.

Their superconducting GENESIS computer now sits next to Nvidia’s Grace Hopper “superchips” under the same roof, built for hybrid AI workloads. As OQC’s CEO put it, this shows quantum can “drive the AI revolution – securely, practically, and at scale.”

This isn’t isolated. DOE’s satellite program ties quantum into aerospace. IonQ’s machines already run on AWS and Google Cloud. Nvidia itself is openly planning for quantum-GPU hybrids in its UK AI infrastructure rollouts.

Let me be very clear here, AI infrastructure as we know it is a massive opportunity. AI-quantum infrastructure is even bigger.

Pure-play quantum stocks are showing it too.

D-Wave (QBTS) is up 2,100% year-on-year. Rigetti up 2,500% in the same period. IonQ “just” up 700% in the last year – admittedly it was coming off a higher base.

Sceptics will warn these companies are still loss-making science projects and are inflated and pumped up. But right now sentiment is running ahead of cashflow — and in markets, that’s often enough for big wins.

So here’s the trillion-dollar question… could quantum outdo GPUs or “superchips” as the next AI inflection point?

Long term, I have no doubt. But it will be a rocky road to get there. The tech is early, the sceptics vocal, and yep not many of them make much in terms of profits… yet.

But for now, investors are betting on promise over product. However, governments are treating quantum as a national security priority, Nvidia is already co-locating qubits with GPUs, and the stock market is assigning real value to the dream.

I think we’re seeing the early roots forming of quantum computing as an equally integral part of the long term, high tech future of our world, as we’re seeing in AI.

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The Media Is Wrong Again

They said Northern Rock was safe.

They said inflation was “transitory.”

Now they’re saying Britain should brace for recession.

But history shows… when the headlines scream “panic”, the real opportunity is often hiding in plain sight.

One contrarian investor believes the UK may be first to profit from this shift

Capital at risk.

Boomers & Busters 💰

AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).

Boom 📈

• Baidu (NASDAQ:BIDU) up 28%
• Tesla (NASDAQ:TSLA) up 22%
• Alibaba (NYSE:BABA) up 15%

Bust 📉

• Teradyne (NASDAQ:TER) down 3%
• Nvidia (NASDAQ:NVDA) down 4%
• Broadcom (NASDAQ:AVGO) down 6%

From the hive mind 🧠

• We wrote about it, and we were right, here they are… Release dates, pricing, features, all of it. The start of Meta’s consumer market domination.
• Betting big on China might be a shrewd and smart long term play. But can their most advanced chip maker really compete and overtake Nvidia?
• $30 billion. That’s all it takes to power the UK’s AI future? I’m guessing it’s a bit more than that, but at least its a healthy commitment from one of the world’s biggest companies.

Artificial Polltelligence 🗳️

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ChatGPT’s random quote of the day

Thanks for reading, and don’t forget to leave comments and questions below,

Sam Volkering

Editor-in-Chief

AI Collision