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Rising Expenses Weigh on QUBT's Profit: Hold or Sell QUBT Stock Now?
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Key Takeaways
QUBT's Q2 revenues jumped to $5.6M from $61,000, while backlog reached about $42.5M.
Operating expenses rose 114% to $21.8M, helping drive QUBT's $11.8M quarterly net loss.
QUBT held $1.3B in cash, equivalents and investments, supporting expansion despite rising costs.
Quantum Computing Inc. (QUBT - Free Report) or QCi is navigating challenging conditions in the quantum-computing market, with investors increasingly emphasizing revenue visibility, cash requirements and commercialization over qubit milestones and government contract wins.
QUBT stock has lost 28% over the past month, underperforming the broader industry, which gained 4.2% during the same period. Shares of QUBT’s key peers, IonQ (IONQ - Free Report) and D-Wave Quantum (QBTS - Free Report) , have lost 21.5% and 19.5%, respectively.
Image Source: Zacks Investment Research
However, QCi’s second-quarter 2026 revenue performance reduced this risk narrative to some extent. Revenues jumped to $5.6 million from $61,000 a year earlier, while contract backlog reached approximately $42.5 million.
Dull Spot for QUBT
Rising Expenses Weigh on Profitability
QCi faces a key risk as its strong revenue growth has not yet translated into positive profitability. The company reported a gross loss of about $1.2 million in the second quarter. Also, operating expenses totaled $21.8 million, more than 3.5X revenues. Operating expenses increased 114% year over year. This large gap between revenues and spending is the fundamental reason behind the company remaining unprofitable.
Management attributed the increase in operating expenses partly to higher personnel/payroll costs associated with R&D. In the second quarter alone, acquisition-related expenses amounted to approximately $7.3 million, accounting for a meaningful portion of operating expenses. Lastly, QCi reported a net loss of $11.8 million in the quarter. Hence, future profitability depends heavily on whether revenues can scale sufficiently to absorb this expanded cost structure.
QUBT’s High Short-Term Price Target
Based on short-term price targets offered by six analysts, the average price target for QCi is $18.67. The average price target represents an increase of 138.75% from the last closing price.
Image Source: Zacks Investment Research
Factors that Might Support QUBT’s Growth Despite Challenges
Diversification Creates a Different Growth Profile
QCi’s second-quarter revenues were generated from its integrated portfolio of quantum and photonics technologies, products and services, serving a diverse mix of government, educational and commercial customers. The company sold, delivered and installed a Dirac-3 quantum optimization system at a leading global consulting firm for enterprise applications, including portfolio optimization.
NeuraWave also reached deployment readiness. QCi completed the acquisition of NHanced Semiconductors, Inc., expanding its advanced packaging, semiconductor manufacturing and photonic integration capabilities. QCi is building exposure across quantum photonics, semiconductors and quantum optimization rather than relying on a single hardware pathway.
Strong Cash Position
At the end of the second quarter, QCi had approximately $1.64 billion in total assets, and $1.3 billion in cash, cash equivalents and investments. Total liabilities increased to approximately $47.2 million from $23.4 million at the end of the first quarter. The liabilities were much lower than the cash levels. Stockholders’ equity remained approximately $1.6 billion, underscoring the company’s strong capitalization following its recent financing and investment activities.
QUBT’s Sales & EPS Picture
In 2026, QCi is expected to experience a huge 4119% improvement in revenues. On the profitability front, the company is expected to incur loss, with estimates reflecting a 72.7% year-over-year widening in loss per share.
Image Source: Zacks Investment Research
Our Take
QCi remains a high-risk but high-potential player in the evolving quantum-computing market. The sharp increase in second-quarter revenues and strong backlog provide greater visibility into demand, while its strong cash position gives financial flexibility to support expansion. Its diversification across quantum optimization, photonics and semiconductor technologies also provides multiple avenues for growth. However, rising operating expenses and continued net losses highlight the company’s challenge of converting revenue growth into sustainable profitability.
Based on the stock price performance, high short-term price-target upside and bold estimates, we advise investors who already hold this Zacks Rank #3 (Hold) stock to maintain their positions, while prospective investors may consider waiting for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
View the Zacks #1 Rank List
Image: Bigstock
Rising Expenses Weigh on QUBT's Profit: Hold or Sell QUBT Stock Now?
Key Takeaways
Quantum Computing Inc. (QUBT - Free Report) or QCi is navigating challenging conditions in the quantum-computing market, with investors increasingly emphasizing revenue visibility, cash requirements and commercialization over qubit milestones and government contract wins.
QUBT stock has lost 28% over the past month, underperforming the broader industry, which gained 4.2% during the same period. Shares of QUBT’s key peers, IonQ (IONQ - Free Report) and D-Wave Quantum (QBTS - Free Report) , have lost 21.5% and 19.5%, respectively.
Image Source: Zacks Investment Research
However, QCi’s second-quarter 2026 revenue performance reduced this risk narrative to some extent. Revenues jumped to $5.6 million from $61,000 a year earlier, while contract backlog reached approximately $42.5 million.
Dull Spot for QUBT
Rising Expenses Weigh on Profitability
QCi faces a key risk as its strong revenue growth has not yet translated into positive profitability. The company reported a gross loss of about $1.2 million in the second quarter. Also, operating expenses totaled $21.8 million, more than 3.5X revenues. Operating expenses increased 114% year over year. This large gap between revenues and spending is the fundamental reason behind the company remaining unprofitable.
Management attributed the increase in operating expenses partly to higher personnel/payroll costs associated with R&D. In the second quarter alone, acquisition-related expenses amounted to approximately $7.3 million, accounting for a meaningful portion of operating expenses. Lastly, QCi reported a net loss of $11.8 million in the quarter. Hence, future profitability depends heavily on whether revenues can scale sufficiently to absorb this expanded cost structure.
QUBT’s High Short-Term Price Target
Based on short-term price targets offered by six analysts, the average price target for QCi is $18.67. The average price target represents an increase of 138.75% from the last closing price.
Image Source: Zacks Investment Research
Factors that Might Support QUBT’s Growth Despite Challenges
Diversification Creates a Different Growth Profile
QCi’s second-quarter revenues were generated from its integrated portfolio of quantum and photonics technologies, products and services, serving a diverse mix of government, educational and commercial customers. The company sold, delivered and installed a Dirac-3 quantum optimization system at a leading global consulting firm for enterprise applications, including portfolio optimization.
NeuraWave also reached deployment readiness. QCi completed the acquisition of NHanced Semiconductors, Inc., expanding its advanced packaging, semiconductor manufacturing and photonic integration capabilities. QCi is building exposure across quantum photonics, semiconductors and quantum optimization rather than relying on a single hardware pathway.
Strong Cash Position
At the end of the second quarter, QCi had approximately $1.64 billion in total assets, and $1.3 billion in cash, cash equivalents and investments. Total liabilities increased to approximately $47.2 million from $23.4 million at the end of the first quarter. The liabilities were much lower than the cash levels. Stockholders’ equity remained approximately $1.6 billion, underscoring the company’s strong capitalization following its recent financing and investment activities.
QUBT’s Sales & EPS Picture
In 2026, QCi is expected to experience a huge 4119% improvement in revenues. On the profitability front, the company is expected to incur loss, with estimates reflecting a 72.7% year-over-year widening in loss per share.
Image Source: Zacks Investment Research
Our Take
QCi remains a high-risk but high-potential player in the evolving quantum-computing market. The sharp increase in second-quarter revenues and strong backlog provide greater visibility into demand, while its strong cash position gives financial flexibility to support expansion. Its diversification across quantum optimization, photonics and semiconductor technologies also provides multiple avenues for growth. However, rising operating expenses and continued net losses highlight the company’s challenge of converting revenue growth into sustainable profitability.
Based on the stock price performance, high short-term price-target upside and bold estimates, we advise investors who already hold this Zacks Rank #3 (Hold) stock to maintain their positions, while prospective investors may consider waiting for a more favorable entry point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.