Quantum computers have the potential to be significantly more powerful than classical computers, making their potential applications immense in the worlds of cryptography, machine learning, and AI more broadly. These machines use encoded quantum bits—qubits—to carry more information and complete processes faster than traditional bits can in classical computing. Quantum computers are not just a bit more efficient than everyday computers, either—in 2023 Google parent Alphabet Inc. (NASDAQ: GOOG) developed a quantum computer capable of completing in seconds what a preexisting supercomputer would only be able to accomplish in a whopping 47 years.

Unsurprisingly, there is a huge race ongoing among tech companies aiming to produce quantum computers and related technologies that are practical and useful in real-world applications. Besides Google, other tech titans like Amazon (NASDAQ: AMZN) and Microsoft Corp. (NASDAQ: MSFT) have made major efforts in this space.

However, a significantly smaller player is now drawing investor attention away from the industry stalwarts. Quantum Computing Inc. (NASDAQ: QUBT) has emerged as a high-momentum stock in the fast-growing photonics and quantum technological landscape. Indeed, QUBT is among the top performing stocks in the entire market for 2024, with an 869.5% return year-to-date as of December 6, 2024. Nonetheless, Quantum Computing faces stiff competition from other specialists in the emerging industry, including IonQ Inc. (NYSE: IONQ), which has more than tripled year-to-date.

QUBT Profile: Small-Cap, Chip Deliveries, Amazon Boost

What sets QUBT apart from some of its rivals? The firm is decidedly small-cap, with a market capitalization of just $881 million as of December 6. It is also pre-revenue, meaning that it has yet to demonstrate its capacity to generate substantial revenue through sales of its products. This means that investments in QUBT are necessarily speculative, and that the company's valuation is dependent upon the expectation that it will be able to eventually deliver on the promises of its technologies and products in development.

QUBT does absolutely have a good deal of promise in those developmental projects. The firm received its first order for its thin-film lithium niobate photonic chips in mid-November, with delivery likely to be completed by the end of the first quarter of 2025. The customer, a "prominent research and technology institute based in Asia," may use the chips in applications related to telecommunications or data communications. Quantum Computing followed that announcement with another indicating a second order had been made.

Another big boost for QUBT came following the announcement that Amazon's AWS is launching an advisory program called Quantum Embark. The program will help Amazon customers prepare for the advent of quantum computing on a large scale. Given Amazon's tremendous reach, it is likely that this program has helped to drive significant additional interest in QUBT as well as other quantum computing firms.

A Deep Dive on QUBT's Latest Earnings

On November 6, 2024, Quantum Computing released earnings for the third quarter, showing a decrease in gross margin to 9% from 52% for the prior-year period. The company said the decline in this area was due to its work toward executing a contract with Johns Hopkins University.

On the positive side, however, the company noted net losses of $5.7 million, narrower than the third quarter of 2023, and an increase of $2.4 million in net assets relative to that period as well. The firm ended the quarter with net assets of $76.8 million. At the same time, net liabilities roughly doubled to nearly $11 million.

Likely more notable for investors, though, was news in the earnings report that Quantum Computing continues to expect its Arizona foundry to begin production early in 2025; this should be an essential step toward achieving consistent revenue.

Where Can QUBT Go From Here?

To consider QUBT's potential for future growth at this stage, it's helpful to look at the forecasted growth rate of the broader quantum computing industry. Analyses differ significantly, but by some estimates, the industry might reach a value of about $12 billion by 2032. If this is the case, and technology adoption is slow (perhaps due to an extended period of product development or other unforeseen delays), Quantum Computing may not have as much of a runway toward continued growth.

On the other hand, more bullish views of the growth path of the overall quantum market could mean plenty of additional demand for QUBT's products and, potentially, unfettered future returns.