Quantum Computing Inc. (QUBT Quick QuoteQUBT - Free Report) or QCi holds a meaningful and differentiated competitive advantage in the rapidly emerging photonics and quantum technology markets. At the core of this advantage is its U.S.-based thin-film lithium niobate (TFLN) photonic chip foundry in Tempe, AZ. This capability positions QCi among a very limited group of players able to support scalable, high-performance photonic device manufacturing domestically.

The TFLN Fab 1 is equipped with both front-end fabrication and back-end optical packaging capabilities under one roof. Fab 1 is currently focused on stabilizing production processes and increasing small-batch manufacturing to meet early customer demand. 

The market dynamics further strengthen QUBT’s positioning. Per a 2024 report by QCi, the current TFLN market is valued at approximately $190 million and is projected to reach an estimated $1.93 billion by 2029, at a CAGR of 39.2%. TFLN is rapidly becoming one of the most promising materials for next-generation telecommunication devices and integrated photonics, paving the way for technologies such as quantum computing, quantum sensing, high-frequency modulators and LiDAR.

The planned development of Fab 2, a larger-scale facility designed to support higher-volume production, demonstrates a forward-looking strategy aimed at capturing accelerating market demand.

Other market players, such as D-Wave Quantum (QBTS Quick QuoteQBTS - Free Report) and IonQ (IONQ Quick QuoteIONQ - Free Report) , are also strategizing to capitalize on the growth opportunities in the TFLN market.

QUBT’s Share Price Performance

In the past year, QUBT’s shares have risen 4%, outperforming the Zacks Internet-Software industry and IONQ’s decline of 16.9% and 11.5%, respectively. However, QBTS has fared relatively better, posting a huge gain of about 225.2%. 

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Here’s Why QUBT Appears Appealing to Investors

Strengthened Balance Sheet: In 2025, Quantum Computing entered into multiple securities purchase agreements with institutional investors through oversubscribed private placements priced at-the-market under Nasdaq rules. In October, the company agreed to sell 37,183,937 shares for expected gross proceeds of $750 million. 

In September, it agreed to sell 26,867,276 shares for $500 million in gross proceeds before expenses. Earlier offerings included 14,035,089 shares at $14.25 per share for $200 million and 8,163,266 shares at $12.25 per share for $100 million.

Total capital raised in 2025 exceeded $1.5 billion, significantly strengthening the balance sheet. The proceeds will support commercialization, scaling TFLN fabrication, advancing quantum machine development, expanding engineering and manufacturing teams, and enabling potential strategic acquisitions. This substantially de-risks near-term execution and provides the capital foundation necessary for Fab 2 planning and high-volume photonic chip production. 

Real World Validation: In August 2025, QCi was awarded a contract by the National Institute of Standards and Technology (“NIST”), part of the U.S. Department of Commerce, to design and fabricate TFLN photonic integrated circuits (PICs). The company also secured a chip order from a Fortune 500 science and technology leader serving defense, intelligence, civil and commercial markets. These awards highlight QCi’s advanced prototyping capabilities and foundry services, facilitating the rapid delivery of mission-critical photonic components.

In January, QCi received its third and fourth purchase orders from a renowned European technical university and a Canadian PIC design house, marking a significant milestone in the QCi Foundry Pilot Launch Program. This was followed by the fifth purchase order for its TFLN photonic chip foundry from a Canadian research group focused on advancing quantum photonics.

Together, these partnerships underscore the growing real-world demand for QCi’s TFLN photonic chip foundry services.  

QUBT’s Sales & EPS Growth

QCi is expected to report a 466.7% improvement in revenues for the fourth quarter. Earnings per share are expected to remain negative, but up 91.5% year over year.

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Key Challenges for QUBT

QCi is prioritizing long-term platform leadership over near-term revenues and investing in manufacturing infrastructure to support future scale. Fab 1 lacks scale and Fab 2’s financial impact is back-end loaded. While successful execution supports real-world validation and credibility, the above-mentioned deployments generally lack scale. Low unit volumes, lengthy sales cycles and customization requirements limit repeatability and near-term revenue expansion.

QUBT’s Shares Look Overvalued

QCi stock is not so cheap, as suggested by the Value Score of F.

QUBT is currently trading at a 12-month forward price-to-sales (P/S) of 600.00X, which is higher than the industry average of 5.55X.

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Here’s How to Play QUBT Stock Now

QCi is entering a pivotal growth phase, supported by a differentiated domestic TFLN manufacturing foundry, accelerating customer traction, and a significantly strengthened balance sheet. With more than $1.5 billion raised to fund scaling, commercialization, and future TFLN foundry expansion, the company has reduced execution risk while positioning itself to capture the rapidly expanding TFLN market. Near-term performance, however, will depend on a successful production increase and market adoption.

QUBT, carrying a Zacks Rank #2 (Buy) at present, already trades at elevated levels. We advise those who have this stock in their portfolios to maintain their position, while others may wait for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.