By Mackenzie Tatananni

Interest in quantum computing has reached a fever pitch this week after a flood earnings reports from some of the best known pure-play quantum companies.

But a recent pullback in quantum stocks has led analysts to draw hard conclusions. Benchmark analyst David Williams trimmed his price target on shares of Rigetti Computing to $40 from $50 and maintained a Buy rating in a note Tuesday, citing "a broader slowing of share momentum across the quantum technology landscape."

While the long-term investment case remains intact, "the recent volatility across emerging tech and AI sectors has tempered near-term investor enthusiasm," Williams wrote.

Unlike traditional computers, quantum systems operate by the laws of quantum mechanics, which opens up a richer mathematical space for problem-solving. The basic units of information are called quantum bits, or qubits, which can exist in multiple states simultaneously.

Rigetti, which specializes in an architecture called superconducting qubit-based quantum, has seen its shares appreciated significantly through mid-October. The stock touched a record intraday level of $58.15 on Oct. 14, followed by a record closing high of $56.34 the following day.

Since then, the stock has retreated considerably. Rigetti declined 5.2% to $29.80 on Wednesday. Peers D-Wave Quantum and IonQ were down 6.4% and 4%, respectively.

While the pullback is "healthy" -- Rigetti remains up nearly 100% this year -- "volatility looks to be subsiding, and we encourage investors to be opportunistic buyers on further weakness as the next catalysts develop," Williams wrote.

Those catalysts include ongoing technical progress and funding announcements. Shares rose for six days straight in October when Rigetti announced two purchase orders for its latest-generation Novera quantum processor. Future developments will likely spark similar rallies.

It isn't the only company reaching technical milestones. IonQ representatives, including the company's President of quantum computing, Chris Ballance, shed light on recent developments at a conference this week.

Ballance, co-founder of Oxford Ionics, which IonQ acquired earlier this year, described the company's recent achievement of 99.99% two-qubit gate fidelity as "opening the door to practical quantum solutions across sectors." Fidelity is scored between 0% and 100%, with 100% fidelity meaning the gate -- a fundamental part of quantum algorithms -- works exactly as intended.

Scientists uploaded a non-peer-reviewed paper illustrating the results to arXiv, a research-sharing platform from Cornell University. While it's yet to be seen whether the result can be replicated in larger quantum machines, it's nevertheless an encouraging sign of progress for the company, whose shares trade largely on hype and headlines.

The publicly traded pure plays might attract the lion's share of attention from investors, but another company that should be in focus is International Business Machines.

The storied tech behemoth, best known as a leader in mainframe computers, conducts quantum research and development under its IBM Research division -- which also undertakes work in artificial intelligence and cloud computing.

On Wednesday, IBM unveiled IBM Quantum Nighthawk, dubbed the company's "most advanced quantum processor yet." The chip is set to be delivered to customers by the end of the year, and promises the ability to execute more complex problems than the previous-generation Heron processor, while maintaining lower error rates.

A separate processor, named Loon, made progress in the R&D stage, IBM added. For the first time, the company successfully demonstrated all the key processor components needed for fault-tolerant quantum computing, where a system maintains normal operations in the presence of errors.

"IBM Loon will validate a new architecture to implement and scale the components needed for practical, high-efficiency quantum error correction," the company said in a news release.

The company has its sights set on releasing the world's first fault-tolerant quantum supercomputer by 2029. IBM Research Director Jay Gambetta told Barron's earlier this year the company wouldn't publicly share a target if it wasn't confident it could reach it.

Shares gained 2.1% following Wednesday's announcement.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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November 12, 2025 14:23 ET (19:23 GMT)

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