By Mackenzie Tatananni

A string of earnings reports from quantum computing companies this week should help investors who are still waiting to see whether they are financing a technological revolution or hedging their bets on a mirage.

Kicking off the earnings period is IonQ on Wednesday, followed by D-Wave Quantum on Thursday and Rigetti Computing on May 12.

Quantum computers harness quantum mechanics to solve problems, using subatomic particles like electrons or photons. In theory, the technology could allow computers to perform calculations that otherwise might take millions of years.

While claims of quantum supremacy have cropped up in the past, such claims are always hotly contested. It's clear the technology has a ways to go before becoming widely accepted.

For now, quantum stocks trade largely on headlines and sentiment, and shares have been temperamental in the absence of major market-moving news in recent weeks.

Investors will be looking for clarity on IonQ's operations and progress toward profitability after a hectic few months. The year began with a leadership transition as Peter Chapman quietly departed from the role of CEO in February. Chapman, who was succeeded by Niccolo de Masi, continued in the role of executive chair.

IonQ has been the subject of multiple short reports this year, which has caused shares to waver. Still, the stock remains up 39% since March 20, when Nvidia hosted its first-ever Quantum Day as part of its annual developer conference.

The event was meant to showcase developments in the field of quantum computing and featured panels of executives who shared their separate visions for the technology. Rather than provide a boost to the sector, the event caused shares to fall sharply in the absence of significant announcements about timelines for wide-scale deployment.

That evening, Quantum Computing posted a wider per-share loss than the previous year and a 17% drop in revenue, adding to the sector's woes.

While IonQ stock has seen double-digit percent gains since then, its peers have had mixed success. Rigetti has climbed 8.8%, while Quantum Computing and D-Wave have fallen 4.2% and 17%, respectively.

It remains to be seen how the market will react following the latest reports, but investors should brace for quarterly losses. All four companies are pre-revenue and unlikely to turn a profit for years to come.

This doesn't mean they're a lost cause. While investors may view earnings as an indicator of a company's health, there are other ways to gauge progress.

IonQ, Rigetti, and privately held Quantinuum were included among the finalists for the Quantum Benchmarking Initiative, a multiyear federal program under the Defense Advanced Research Projects Agency.

Another encouraging sign is the continued investment by established tech giants, including Microsoft, IBM, and Alphabet-owned Google.

The arena is growing increasingly crowded. Quantinuum, for instance, is looking to go public in the next two years, a person familiar with the matter told Barron's.

Interest has certainly continued to build, but quantum computing isn't breaking out just yet. Prepare for the long haul.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 07, 2025 03:00 ET (07:00 GMT)

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