Xanadu Quantum Technologies' (XNDU) stock will rally as it meets more milestones and begins monetizing through quantum computing as a service, selling quantum hardware and other paths, RBC Capital Markets said in a note Monday.

Analysts said that Xanadu provides investors with exposure to quantum computing, a generational opportunity and photonics, a "unique" modality.

RBC said that while Xanadu still has several years before it can commercialize, it has already achieved key development milestones and has a path towards a fault-tolerant quantum data center.

Analysts, however, noted difficulties with benchmark valuation as Xanadu has nominal near-term revenue.

RBC initiated coverage on the stock with an outperform, speculative risk rating, and a $16 price target.

Price: 4.90, Change: +0.13, Percent Change: +2.62