⚛️ Quantum hits excited state

Quantum computing stocks soared on Thursday after the Trump administration signed a number of letters of intent to award a total of $2 billion in grants to nine quantum companies, in deals that also include equity stakes. 

The following companies are part of the overall package, with respective amounts of funding reported:

• IBM, finishing up 12% on the day, received $1 billion of the reported grant. GlobalFoundries, up about 15%, got $375 million.

• D-Wave Quantum (up 33%), Rigetti Computing (up 30%), and Infleqtion (up 31%), as well as the private Atom Computing, PsiQuantum, and Quantinuum, all won $100 million each, with Diraq awarded $38 million.

• For IBM, the largest recipient, the funds will be used to “build an American quantum chip foundry,” supporting the research and development efforts of a new IBM company: Anderon, set to be “America’s first pure-play quantum foundry,” according to IBM, which will match the federal funding dollar for dollar, plowing $1 billion into Anderon.

Other quantum names that didn’t book government deals yesterday also ticked up in sympathy, including pure-play IonQ, Quantum Computing, Arqit Quantum, and Honeywell, following the administration’s show of confidence in the nascent technology.

The Takeaway

The process of reaching these deals with the government included “a very rigorous technical evaluation over many, many months,” Infleqtion CEO Matthew Kinsella told Sherwood News. “Every quantum company I have spoken with throughout the supply chain applied and put in a proposal for this CHIPS Act money. So I view this as the US government having done a very, very broad overview of the quantum industry and selected the partners that they believe can execute.”

Rumors and reports of potential government support buoyed quantum computing stocks during September and October of last year, contributing to frenzied, options-fueled gains for many of its most well-known constituents.

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For the past year, Nvidia’s earnings days, and the sessions that follow, increasingly feel like they’re designed in a lab to make people like us look like idiots for trying to offer any thoughts on what the results and the market reaction actually mean.

Yesterday’s loss on the day was the fourth consecutive time the world’s most valuable company gave back ground in response to better-than-expected quarterly results. 

And you know what? Those days have meant diddly squat in the grand scheme of things.

• Shares of the chip designer meandered Thursday after doing a whole lot of nothing following the release of fiscal Q1 2027 results on Wednesday afternoon, which included a conference call with CEO Jensen Huang and CFO Colette Kress.

• Since Nvidia unofficially kicked off the AI boom in May 2023, it’s had a one-day decline after earnings on four separate occasions. 

• Three months after that knee-jerk sell-off, it has then rocketed higher, besting the S&P 500 meaningfully (in aggregate), too.

The 24 hours following Nvidia’s earnings reports are increasingly a time when financial journalists feel pressure to engage in creative writing about lines on charts because there are often no compelling, reasonable stories to tell. You end up reading things like, “Nvidia’s earnings beat expectations, but the stock is selling off because they didn’t beat the highest expectations” — as if that makes a lick of sense or is a standard we apply to most securities.

The Takeaway

When the world’s most valuable company reports, it’s easy to miss the forest for the trees. Among S&P 100 companies? For the most recent quarter versus the same period a year ago, Nvidia’s revenue growth is better than all but one of them (Micron). It’s the fourth-cheapest based on price to (forward) earnings growth. It has the 13th-strongest earnings revisions year to date, bested only by other chip or AI-linked companies and a couple of oil companies. That’s the forest.

Read what Wall Street thought

Tesla declared on X that its Full Self-Driving (Supervised) technology is “now available” in a number of countries, including its second-biggest market, China — news that prompted a fresh round of headlines. The thing is, while a limited version of Tesla’s supervised FSD has been available in China since last year, it’s not clear what has materially changed since CEO Elon Musk went to China last week.

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• 🏛️ Attorney General: Acting Attorney General Todd Blanche, a contender to be the next attorney general, saw his chances of getting the job drop from 55% to 46%* Thursday after allies in the GOP appeared to rebuff a key proposal that Blanche has been pushing on the Hill. 

• 🎮 Games: Yesterday Take-Two Interactive assured investors that its flagship “Grand Theft Auto VI” will come out in November. Markets remain at least a tiny bit skeptical that the publisher will successfully get it across the line, assigning a 90% chance — notably not 100% — that it releases the game before December 1, 2026. 

*Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.

• Premarket earnings: BJ’s Wholesale Club