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Is Quantum Computing a Good Investment Right Now?

This company, named for the hot new tech with vast applications, is struggling to be profitable, so is Quantum Computing a good investment?

Quantum computing involves the use of quantum states like entanglement and superposition to perform calculations. I don’t know what any of that means but the results of quantum computation are more accurate and achieved faster than with traditional binary machines. This opens the door to all sorts of applications from finance to mining to security to name a few and ultimately, a total addressable market (TAM) of $65 billion by 2030. 

Quantum Computing (NASDAQ: QUBT), named for the forty-year-old tech, is one company that is trying to take a bite out of the market but has yet to post a profit; so, is Quantum Computing a good investment?

The bull case for Quantum Computing

Quantum Computing offers its clients a lightweight API to apply in their calculations. That means users can implement their business processes without requiring thousands of lines of code for quantum computers but rather three or four lines for each API through the company’s Qatalyst™ platform. Through the company’s new QCI Partner Program, partners can offer their clients solutions using Qatalyst™ APIs without the need to hire costly technical staff. All of this has phenomenal real-world use and application and the company is poised to snatch up future market share in the sector.

The bear case for Quantum Computing

Where to begin? As of today, Quantum Computing can be seen as nothing more than a vaporware company with zero revenue and growing losses due to operational expenses. Its stock price isn’t so great either, having dropped nearly 50% year-to-date (YTD). Having zero revenue means the company needs to raise capital by issuing shares, which it has done in spades; in fact, its number of outstanding shares has grown seven-fold in the last three years alone and that swelling is showing no signs of slowing down. 

Also, the company has issued nearly a million shares over the last few years to employ investor relations firms rather than spending capital on R&D. And lastly, Quantum Computing is known for a few ethically questionable decisions like purchasing a failed solution from an ex-CTO and advertising services from a member of the company’s board. 

So, is Quantum Computing a good investment?

No. The company isn’t concentrating on growing its product base with R&D expenditure and doesn’t have a winning management team. Additionally, share dilution is currently capped at 250 million shares and the company has only scratched the surface with only 10% of that number. This is not a good stock to own right now.

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Quickfire round:

1. Who is the CEO of Quantum Computing?

Robert Liscouski, as of February 2018

2. Why QUBT?

After Qubit (or quantum bit), the most basic unit of information on a quantum computing system

3. Where is the company’s headquarters?

Leesburg, Virginia