Quantum Leap: IonQ advances scalable quantum network technology

Welcome to the latest edition of “Quantum Leap” where The Fly decodes news and activity in the quantum computing space.

QUANTUM INFORMATION TRANSMISSION: IonQ (IONQ), with research support from the Air Force Research Lab, announced a significant technological advancement in its pursuit of scalable quantum networks. IonQ demonstrated the frequency conversion of photons from visible wavelengths used to interface with trapped barium ions, into telecom wavelengths on a prototype system. This paves the way for interconnecting quantum computers over vast distances using the current existing fiber optic infrastructure. The company said, “The ability to transform visible light, which is used in IonQ’s trapped ion quantum systems, into telecom wavelengths is essential for transmitting quantum information efficiently over long-haul fiber optic cables. This milestone signifies a major advancement in IonQ’s long-term vision for the Quantum Internet – distributed quantum computing via secure quantum networks.”

RESTRUCTURING: Quantum Corp (QMCO) announced it has entered into a definitive agreement to restructure the company’s outstanding term debt held by Dialectic Technology SPV and certain other lenders. In addition, Quantum amended its existing term loan credit and security agreement with its current term loan lenders to remove the financial covenants therein.

QUANTUM RESISTANT CRYPTOGRAPHY: Sealsq (LAES) announced the signing of a memorandum of understanding with the Seoul Metropolitan Government and Invest Seoul, represented by Mayor Oh Se-hoon, which aims to establish a post-quantum semiconductor personalization, research and design center in Seoul. The parties will now work together to identify suitable locations and local partners to join this exciting project. The proposed new center would serve as a facility dedicated to researching, designing, testing, and embedding quantum-resistant cryptographic keys and identities into semiconductor chips, a final step in the value chain that ensures devices are secured against future quantum-enabled cyberattacks. The company said, “The facility would serve to: Research and design innovative RISC-V chip architectures integrated with post-quantum cryptography; Personalize and test post-quantum cryptographic chips at scale for IOT applications; Integrate quantum-resistant encryption modules into satellite systems, enhancing secure space communications; Act as a regional hub for semiconductor and space innovation, strengthening South Korea’s leadership in both industries. The project plans to leverage RISC-V-based chip architectures with embedded post-quantum cryptography, fully compliant with Common Criteria and NIST’s Post-Quantum Cryptography guidelines.”

PRIVATE PLACEMENT: Quantum Computing (QUBT) announced that it has entered into securities purchase agreements with institutional investors for the purchase and sale of 26,867,276 shares of common stock in an oversubscribed private placement priced at the market under Nasdaq rules. The offering is expected to result in gross proceeds of $500M, before deducting offering expenses. The closing of the offering is expected to occur on or about September 24, subject to the satisfaction of customary closing conditions. Participants in the private placement include several large existing shareholders alongside a first-time investment from a preeminent global alternative asset manager. The company intends to use the net proceeds from the offering to accelerate commercialization efforts, strategic acquisitions, expand sales and engineering personnel, working capital, and general corporate purposes. Titan Partners Group, a division of American Capital Partners, is acting as the sole placement agent for the offering.

QUANTUM SHIELD: Sealsq announced plans to launch the Quantum Shield QS7001 in mid-November. Positioned to be the world’s first secure chip to embed NIST-standardized quantum-resistant algorithms ML-KEM and ML-DSA at the hardware level, the Quantum Shield QS7001 aims to secure critical applications such as cryptocurrency transactions, but also defense systems, healthcare infrastructure, and IoT devices against future quantum computing threats.

ANALYST COMMENTARY: B.Riley upped price targets in the quantum sector following the Quantum World Congress. The industry’s technology and commercial progress is outpacing B. Riley’s prior positive views, the analyst told investors in a research note. The firm believes the Department of Energy’s National Labs advanced tech development is flipping from a scientific to commercial development emphasis. It sees evidence that “former frontier technology is rapidly advancing toward integrated capability and commerciality.” The firm made the following price target changes:

• increased its price target on Rigetti Computing (RGTI) to $35 from $19 and kept a Buy rating
• elevated its price target on D-Wave Quantum (QBTS) to $33 from $22 and maintained a Buy rating
• raised its price target on IonQ to $100 from $75 and reiterated a Buy rating

Lake Street initiated coverage of Quantum Computing with a Buy rating and $24 price target, calling the stock a “compelling way to participate in the rapidly growing market of quantum computing.” Broader adoption of quantum computing is still in its early stages, but the firm believes the company is approaching an inflection point where it will see a step function in revenue in 2026 and 2027 as continued technological advancements in the industry and Quantum’s first-mover advantage “create a long runway for growth,” the analyst tells investors.