Rumor mill boosts quantum stocks

Quantum stocks took a quantum leap today…before the rally fizzled out.

The Wall Street Journal reported this morning that the Trump administration is in talks to take equity stakes in a slew of quantum computing companies in exchange for federal funding.

Word of the government’s possible investment sent shares of quantum computing stocks flying. But there was a catch: The White House stepped in this afternoon to say that it is not negotiating equity stakes in the companies, bringing stocks back down to earth.

Why did this rumor gain so much traction? The Trump administration—like an idealistic liberal arts college grad who realizes what taxes are for the first time—has been eyeing the private sector. The White House has already invested $400 million in rare earths mining company MP Materials and took a roughly 10% stake in Intel earlier this year. Every time the government invests in a company, its shares head straight for the moon—so investors jumped in at the first sign of a potential purchase in the quantum computing industry.

Even though quantum stocks gave up some of their gains, they ended the day far higher than where they began: Rigetti Computing gained 9.8%, Quantum Computing jumped 7.2%, D-Wave Quantum surged 13.86%, and IonQ rallied 7.07%

What’s the big deal with quantum, anyway?

The rumor seemed so real partially because the federal government—and President Trump himself—has taken a particular interest in quantum computing, which uses advanced mechanics to solve problems that traditional computers are unable to handle.

Back in 2018, Trump signed into law the National Quantum Initiative Act, which pledged $1.2 billion in federal funding for quantum research. Under Biden, the CHIPS and Science Act gave funding to a slew of quantum programs. And most recently, a group of senators introduced a law that would pledge an additional $2.7 billion for research into quantum computing.

Quantum computers are of interest for national security because the uber-fast computers can defend from cyberattacks, and have potential military and intelligence uses as well. The Trump administration has made a point this year to invest in companies with strategic value, such as critical mineral miners, which just made today’s rumor seem all the more realistic.

Quantum stocks have had a volatile run this year thanks to the promise—and perils—of the technology. But today, investors bought the rumor and sold the news, leaving quantum stocks looking forward to their next big pop.—LB