By Mackenzie Tatananni

Quantum computing has frequently been touted as the next big technology, with transformative potential spanning sectors from healthcare to finance to defense. Now, investors appear to be buying in.

Just look at the reaction to IonQ's earnings. The stock surged 22% on Thursday, marking its largest single-day percent increase since a 37% jump in May 2025, which came after a Barron's article highlighting IonQ's efforts to grow into the so-called Nvidia of quantum computing.

In an interview after the company's latest earnings, which beat consensus estimates, CEO Niccolo de Masi doubled down on the Nvidia comparison, saying he believed IonQ could experience explosive growth in years to come.

"I look at companies with $100 billion market caps, and I go, that's not an absurd concept," de Masi said. "Nvidia had $60 billion dollars in quarterly revenue and we had $62 million, but they had $60 million of revenue in a quarter at one point." (Nvidia logged less than $200 million in revenue in its first quarter as a public company.) "There's room for us to go a long way -- I don't knows exactly how far."

Call him bombastic, but the argument about quantum being a speculative bet has weakened as Wall Street increasingly piles into the space, with more and more analysts initiating coverage on shares of the pure-play companies that are concentrating their efforts on quantum.

That can mean focusing solely on computing, as D-Wave does, or diversifying across technologies -- including sensing and networking -- like IonQ.

The companies use different modalities. D-Wave pioneered quantum annealing, tailored to optimization tasks. Gate-model systems also vary.

"An investment of us is a bet on the quantum industry," de Masi said in reference to the company's growing reach across technologies. IonQ has been on an acquisition spree, snapping up companies specializing in atomic clocks to quantum sensors and, most recently, semiconductors. The latter will help IonQ take control of its own chip production.

While the aggressive M&A has drawn scrutiny from some on the Street, analysts noted in the wake of IonQ's latest earnings that the "overall diversification of the business across products" contributed to its strength in the quarter.

Expanding too far, too quickly could be a problem for the pure plays. The companies are all fairly young, have yet to turn an annual profit, and have yet to broadly commercialize their technology. It's the larger players that have room to experiment.

Alphabet's Google is often cited as a leader in quantum. Its Willow chip helped spark hype at the end of 2024. Still, it isn't counting on the technology as a major revenue driver yet.

IonQ's de Masi conceded that one big player stood out: International Business Machines, which Barron's profiled in December. "I feel like there's two ecosystems right? There's IBM and there's the rest of us," he said. "I think we have the greatest chance of mounting a meaningful, if not prevailing, challenge."

It's a tall order. IBM's efforts in quantum have spanned decades, and they haven't gone unnoticed. Gartner, a technology research firm that monitors the sector, in a report last year called IBM "the quantum computing company to beat," citing its scale and ecosystem.

IBM recently elevated Jay Gambetta, the former head of its quantum division, to lead its research efforts as a whole -- a sign of how seriously it takes quantum.

Wall Street has been even more excited about the smaller players. Shares in pure plays have doubled -- and in some cases tripled -- over the past 12 months.

IonQ stock has surged 66% over that period, outstripping a 23% gain for the tech-heavy Nasdaq Composite. Rival D-Wave has gained nearly 270%. Rigetti Computing, another closely-watched player that is just starting to break out of R&D in earnest, has risen about 120%.

No one is more enthusiastic than the quantum CEOs themselves, but they can't be too aspirational. D-Wave CEO Alan Baratz told Barron's after earnings on Thursday that investors could expect to see unpredictable revenue patterns for the foreseeable future.

"We're still at the early stages of the commercialization of quantum," Baratz said. It's a surprisingly modest take from a company that frequently touts its roster of clients including AT&T, whose representatives spoke at D-Wave's annual user conference in January.

Rosenblatt analyst John McPeake called D-Wave's latest quarter "uneventful," though bookings were strong. Year over year, bookings fell 27%, largely because of last year's first sale of an Advantage system.

Investors must reckon with how new this all is. CEOs still have to convince customers -- and shareholders -- that quantum will be transformative.

The company's expansion into gate-model systems supports D-Wave's aspirations to become a "one-stop shop" for quantum computing, Baratz told Barron's. "We want to make sure we can deliver everything our customers need to be able to solve their hard computational problems leveraging quantum computing."

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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February 27, 2026 10:26 ET (15:26 GMT)

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