Quantum Computing Inc. (QUBT) stock price went parabolic on Wednesday as it formed a God candle and rose by over 92%. It soared to a high of $3.42, which was its highest level since February 2023. It has jumped by more than 686% from its lowest level in 2023, giving it a market cap of over 136%.
Why QUBT stock price surged
Quantum Computing Inc. is a company that makes integrated photonics and quantum optics solutions that power quantum computers. Its solutions are designed to operate at room temperature and low power at an affordable cost.
The company hopes that its solutions will be used in industries like cloud computing, quantum computing, LiDAR, and artificial intelligence.
The QUBT stock price surged after the company announced its first order for its lithium niobate (TFLN) photonic chip foundry. Details of the client were not made public although it mentioned that it was an Asian research and technology company.
Also, the company did not mention the amount of money that it will receive. QUBT mentioned that the frst photonic chips will be delivered in December this year and the full order set will be completed in the first quarter of 2025. In a statement, Pouya Dianat, the head of technology at Quantum Computing Inc. said:
“By integrating TFLN into our own quantum technology, we are able to enhance the precision and performance of our systems, and QCi is proud to play a critical role in the future of integrated photonics. We anticipate additional orders in the coming months.”
Quantum Computing Inc. is growing from a low base
The new order came a week after the company’s revenue showed that its business was growing from a low base. Its revenue rose to $101,000 in the third quarter, much higher than the $50,000 it made in the same period in 2023.
Its revenue’s low base is mostly because the company has started to ship its products just recently. The commissioning of its TFLN foundry plant in Arizona happened recently, with the production expected to start in early 2025.
Its operating expenses stood at $5.4 million, an improvement from the $6.6 million it spent in the same period last year. The improvement happened as the company focused on cost reduction, especially in the general and administrative expenses.
A key challenge is that Quantum Computing Inc. may need to raise more cash in the coming months, especially now that the stock has gone parabolic. It ended the last quarter with $3.06 million in cash and equivalents, $63 million in account receivables, and $241,00 in inventories.
For a company that had a net loss of over $5 million in the last quarter, it means that it will likely need more cash soon.
QUBT has been a highly dilutive company over the years as the number of outstanding shares rose from 7.36 million in 2020 to over 94.4 million today.
QUBT stock analysis
QUBT chart by TradingView
The weekly chart shows that the QUBT share price bottomed at $0.5250 and formed a double-bottom pattern. It has now formed a God candle and moved above the 50-day and 200-day moving averages.
QUBT stock has also jumped above the key resistance level at $1.35, its highest level on March 18. Therefore, I believe that these gains will not be sustainable as dilution risks remain. As such, the stock may drop and retest the key psychological level at $2 in the coming weeks or days. This view will become invalid if the stock moves above the key resistance level at $3.42, its highest level this week.
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