The US government is taking a quantum leap of faith.

Quantum computing companies soared today after the Trump administration announced it’s offering $2 billion worth of grants to nine companies. The deals involve the US government taking equity stakes in the firms, similar to the strategy it has used to invest in critical minerals infrastructure.

The largest chunk of money is going to IBM, which surged 12.48% today. The US Commerce Department is awarding the firm $1 billion, which will be used to create an entirely new company called Anderon that will build and operate the first US-based “purpose-built” quantum foundry, according to IBM.

Other firms included in the deal shot up:

• Chipmaker GlobalFoundries surged 14.92% on the news that the US government is taking a 1% stake in the company, as well as awarding it $375 million in funding.
• D-Wave Quantum, Rigetti Computing, and Infleqtion are all receiving $100 million in funding. D-Wave popped 33.54%, Rigetti jumped 30.57%, and Infleqtion surged 31.48%.
• Atom Computing, PsiQuantum, Quantinuum are each receiving $100 million, but are private.
• Diraq, a privately owned startup, is receiving a measly $38 million.

The US government will take minority stakes in all of the firms mentioned, but hasn’t disclosed the exact amount, according to the Wall Street Journal.

The big deal: Quantum computers process information using quantum bits, and in their final form, quantum computers could do tasks exponentially faster than today’s most powerful supercomputers. Similar to the AI arms race, the US government sees being the first to implement the tech as a national security concern. According to McKinsey, quantum computing could deliver about $1.3 to $2.7 trillion of economic value by 2035.

Quantum expectations

Despite the fact that 99.9% of people couldn’t tell you the difference between a bit and a qubit, many scientists, analysts, and investors all agree quantum computing is a BFD. But the actual technology is still very much in its infancy, and some worry that the industry is too nascent to be calling winners just yet.

Last year, Nvidia CEO Jensen Huang said that “very useful” quantum computers could still be decades away. Google CEO Sundar Pichai also said last year that the technology was still nascent, and 5 to 10 years away from being useful.

“The quantum moment reminds me of where AI was in the 2010s, when we were working on Google Brain and the early progress,” Pichai said at a conference last year. And a source in the government told the WSJ that the number of deals hedges risk if not every company takes off or pans out over the years.

Time for those qubits—whatever they are—to get to work.—LB

🟢 What’s up

• Bloom Energy jumped 8.95% to a 52-week high after announcing an AI infrastructure partnership with Nebius, which also gained 14.65% on the news.
• E.l.f. Beauty rose 4.73% as the company said it plans to roll back some tariff-related price hikes to support demand.
• Applied Digital surged 21.51% after signing a new 15-year lease for one of its AI datacenter facilities with a major hyperscaler.
• Kontoor Brands climbed 6.75% after agreeing to sell its Lee business to Authentic Brands Group in a deal worth up to $1 billion.
• Spotify gained 13.09% on strong long-term guidance and a new AI-focused partnership with Universal Music Group.
• Birkenstock advanced 19.56% after accelerating its stock buyback program.
• Wolfspeed rose 18.56% following a bullish research note linking the company to rising AI infrastructure demand.
• Ralph Lauren popped 13.77% after beating quarterly earnings expectations and issuing solid fiscal 2027 guidance.

What’s down

• Intuit fell 20.02% after announcing plans to cut 17% of its workforce and reporting revenue slightly below expectations.
• Deere slipped 5.3% as investors remained cautious on the farming sector despite better-than-expected quarterly results.
• Rocket Lab dropped 6.58% after SpaceX filed paperwork to begin publicly trading on the Nasdaq, while fellow competitor Firefly Aerospace lost 2.59% as well.
• Kroger fell 2.34% after the company said it plans major price cuts to regain market share amid intensifying grocery competition.

SpaceX just pulled back the curtain on the biggest IPO of the year (and perhaps ever), and some of the numbers from the rocket maker’s prospectus are out of this world—and not always in a good way.

The largest number in the 277-page preview is $28.5 trillion, or the size of SpaceX’s total addressable market. But the company’s got a long way to go before it wins the space race: Despite 2025 revenue rising 33% year over year to $18.7 billion, SpaceX still posted a loss of $4.9 billion last year. Turns out exiting the atmosphere is pretty expensive, with the company shelling out about $70 billion on capex last year—which might be rookie numbers next to Amazon’s $200 billion capex guidance for 2026, but it’s not nothing.

That lack of profitability might be a defining feature for what’s shaping up to be a summer of red-hot public debuts. OpenAI is expected to file for an IPO as soon as tomorrow, but despite the fact that it could be worth $1 trillion when it arrives on the market, the startup has yet to earn a profit.

The one company that might buck the trend is Anthropic, which just revealed it expects to turn an operating profit this quarter. Though the startup will likely still lose money this year, hitting any sort of profitability at this stage is a stunning feather in its cap, and underscores Anthropic’s incredible recent growth.

TLDR: SpaceX, OpenAI, and Anthropic all have high hopes of being well-received when they hit the public market. But as prospectuses get published, would-be investors should ignore the big flashy numbers and focus on the one that ultimately moves share prices: profits.—MR

Yesterday, Target posted its strongest quarterly sales growth in years. Today, rival Walmart painted more of a mixed picture.

The world’s largest brick and mortar retailer beat revenue expectations and met earnings estimates. Notably, global e-commerce sales jumped 26%, while its advertising business surged 37%—great news for shareholders who want Walmart to build out higher-margin revenue streams.

But instead, investors focused on the weak guidance: Walmart reiterated the same cautious fiscal 2027 outlook that disappointed Wall Street last quarter, while its forecast for the current quarter also came in below expectations. Shares fell 7.27% on the news.

Consumers feel the squeeze

Walmart’s softer outlook reflects a consumer environment that remains under pressure. Higher fuel costs alone created a roughly $175 million headwind for the retailer last quarter, while the average customer bought fewer than 10 gallons of gas per visit for the first time since 2022—a sign that shoppers are watching every dollar.

That’s in addition to sticky inflation and elevated interest rates, which have pushed prices higher across categories and dragged consumer sentiment to record lows earlier this month. And while larger tax refunds helped support spending last quarter, management warned that the tailwind may fade in the months ahead.

Still, Walmart executives argue the company is navigating the environment better than expected. CFO John David Rainey said Walmart’s second-quarter operating income guidance is among the strongest the retailer has issued in about a decade, given the economic backdrop.

The race for value shoppers

The battle for budget-conscious shoppers is only intensifying as retailers race to win market share and cement themselves as the go-to destination for value.

Walmart appears to be one of the best-positioned retailers in the current environment, continuing to attract both lower- and higher-income shoppers. The company is also prioritizing competitiveness over profits in the near term, choosing to absorb most fuel-cost increases instead of passing them on to shoppers, while raising the number of discounts by 20% from a year ago in an effort to keep prices attractive.—SY

• Smart-ring maker Oura just confidentially filed for an IPO.
• Anthropic is reportedly in talks to rent Microsoft AI server chips.
• AMD will invest $10 billion in Taiwan’s semiconductor industry.
• Jamie Dimon says JPMorgan will undergo an AI-era revamp.
• Eli Lilly’s new weight loss drug, retatrutide, helped patients lose an average of 28% of their body weight, the highest of any GLP-1 yet.
• Tesla announced that its “Full Self-Driving” features will finally be available in China, after years of delays.
• Victoria’s Secret is ushering in “a new era of sexy” (their words) with a fresh stock ticker: VSXY.

Economic announcements: The final consumer sentiment report for May is sure to be a fun read.

Earnings reports: Few and far between, but we’ll happily take a quiet Friday heading into Memorial Day weekend.

Everything else: Kevin Warsh will be sworn in as the new chair of the Federal Reserve in a ceremony at the White House, the first time the ceremony has been held at the President’s residence since 1987.