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US Government Stake Talks Propel Quantum Computing Firm Shares

Recent discussions regarding U.S. government investments in quantum computing companies have sparked significant interest in the market. On October 23, 2023, shares in various quantum firms surged following a report suggesting the Trump administration was considering acquiring equity stakes in these companies to bolster federal support and secure supply chains.

Surge in Quantum Computing Shares

After the announcement, shares of prominent U.S. quantum computing firms experienced notable increases. The following companies saw their stock prices rise:

  • IonQ (IONQ.N) – Up to 16%
  • Rigetti (RGTI.O) – Up to 16%
  • D-Wave Quantum (QBTS.N) – Up to 16%
  • Quantum Computing (QUBT.O) – Up to 16%

Additionally, the Defiance Quantum ETF (QTUM.O), which tracks developments in quantum computing and machine learning, reported a 1.3% increase. This performance contributed to a remarkable 32% gain for the year.

Government Position Clarification

However, a spokesperson from the U.S. Department of Commerce clarified that the department is not currently negotiating any deals with these companies. This statement has introduced some uncertainty in the market.

Strategic Government Initiatives

The Trump administration has been actively seeking to enhance U.S. supply chains, particularly concerning critical minerals and semiconductors. By converting federal grants into equity stakes, the government aims to diminish reliance on foreign entities, especially from China.

Efforts to secure investments have also led to discussions regarding stakes in other key companies, including:

  • Lithium Americas (LAC.TO)
  • MP Materials (MP.N)
  • Intel (INTC.O)

Quantum Computing’s Economic Potential

Chris Beauchamp, Chief Market Analyst at IG, commented on the potential of quantum computing, stating that it could revolutionize the U.S. economy. He emphasized that this unconventional approach by the administration reflects a significant shift in how the government is supporting emerging technologies.

Despite the excitement around quantum computing, existing systems currently struggle with error rates, which limits their effectiveness compared to classical computers. Major tech players are racing to overcome these challenges. For instance:

  • Microsoft announced advancements in quantum chips, predicting significant progress within a decade.
  • IBM aims to develop a practical quantum computer by 2029.

Investment Perspectives

JPMorgan Chase also signaled confidence in the quantum computing sector, marking its commitment with a $1.5 trillion investment initiative aimed at key industries. Overall, the growing interest in quantum technology underscores its potential impact on future economic growth.

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