Quantum stocks sputter after nearly doubling thanks to the US government calling the technology an R&D priority

Quantum computing stocks have been on an absolute tear, driven in large part by rumors of more US government support for the nascent technology that were realized in a memo earlier this week highlighting quantum technology as an R&D budgetary priority for fiscal 2027.

Emergent technologies — most notably the internet — have historically benefited from a strong government push. Even now, the President Trump-backed AI joint venture known as Stargate is playing a starring role in driving billions in market value for established tech giants like Oracle.

The quantum industry, and the investors flocking to the space, are hoping that their development is similarly turbocharged by state support.

“Agencies should deepen focused efforts, such as centers and core programs, to advance basic quantum information science, while also prioritizing R&D that expands the understanding of end user applications and supports the maturation of enabling technologies,” the memo says. “Opportunities to support pre-competitive R&D through mechanisms such as consortia and other technology transition efforts, investment in critical infrastructure and testbeds, and advanced manufacturing to enable next-generation quantum devices should also be pursued.”

The memo, which was written by Director Russell Vought and Michael Kratsios, director of the Office of Science and Technology Policy, also calls calls for agencies to “prioritize R&D for cybersecurity resilience, to ensure the Nation is prepared with post-quantum cryptography to defend against future threats.”

The news is being cheered by quantum computing execs, who would also appreciate some more urgency behind this support for their industry.

“It’s encouraging to see the Trump Administration recognize that the private sector must play a central role in applied research and commercialization for quantum technologies,” D-Wave CEO Dr. Alan Baratz told Sherwood News. “As the government explores emerging technologies, we urge policymakers to consider how quantum and AI can work together to address pressing public-sector challenges. While these priorities are reflected in the FY27 budget, there’s no need to wait.”

The handful of pure-play quantum computing companies we track closely — IonQ’s, D-Wave Quantum, Rigetti Computing, and Quantum Computing — have added a whopping $23 billion in market capitalization over the past month, nearly doubling in the process through Wednesday’s close. That hot run is reversing course on Thursday, however.

Other positive catalysts for the industry over this period include M&A activity, tech breakthroughs, new deals with governments and affiliated agencies, and a wave of price target hikes by Wall Street — even as those more optimistic outlooks have been outstripped by each and every pure-play quantum stock’s recent rallies.

That being said, current valuations for quantum computing firms embed a lot of optimism around the idea that a government push will soon lead to explosive revenue growth in the future. Combined, these firms have generated less than $100 million over the past four quarters. And these companies have their fair share of detractors, including former hedge fund manager and biotech founder Martin Shkreli, who has been a vocal opponent of their businesses. Short interest as a share of float is about 18%, on average, across these four stocks as of mid-September, per exchange data.