Quantum Leap: IonQ and Honeywell sign onto DoE quantum-in-space collaboration

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

QUANTUM IN SPACE: The Department of Energy’s Office of Technology Commercialization announced the expansion of the quantum-in-space collaboration with three new signatories: IonQ (IONQ), Honeywell (HON), and the Electric Power Board of Chattanooga. “The Quantum-in-Space Collaboration brings together government, industry, and academic partners to advance quantum technologies in orbit,” the agency said in a statement.

M&A: IonQ announced it has entered into a definitive agreement to acquire Vector Atomic. Vector Atomic has secured $200M+ in government contracts and delivers U.S. federal and national security applications. The all-stock transaction is anticipated to accelerate IonQ’s entry into the quantum sensing market. All 76 of Vector Atomic’s employees will join IonQ. The company was founded in 2018 and is based in Pleasanton, California.

PRIVATE INSTANCE LICENSE: Arqit Quantum (ARQQ) announced that Fabric Networks has purchased a full commercial private instance license for Arqit’s NetworkSecure platform. This agreement will enable Fabric Networks to scale quantum-safe network deployment across its customers’ infrastructure. Fabric Networks infrastructure includes fibre-optic networks, private LTE and 5G, pipeline telemetry, broadband, and managed network services.

SHARE SALE: In a regulatory filing, Rigetti Computing (RGTI) disclosed that its director Ray Johnson sold 126.3K shares of common stock on September 12th in a total transaction size of $2.53M

SATELLITE COMMUNICATIONS: Honeywell announced a memorandum of understanding that advances a European Space Agency-backed initiative to develop new quantum-secured satellite communication systems. The MOU, signed with Redwire (RDW), is the latest milestone under the Quantum Key Distribution Satellite consortium, which was launched in 2024 and is being led by Honeywell. The company said, “It will enable the two companies to explore opportunities to mature and expand the use of quantum key distribution technology as part of the consortium, which operates under the European Space Agency’s QKDSat Public Private Partnership. The aim is to combine Redwire’s quantum platform technology with Honeywell’s quantum optical payload, creating a fully functional payload and platform by mid-2026. The collaboration aims to advance quantum-secured technologies that could help governments and defense agencies protect sensitive information from emerging cyber and quantum threats, while also accelerating next generation quantum key distribution services for commercial customers. The QKDSat project brings together companies from ESA Member States including Belgium, Austria, Canada, Czechia, and the United Kingdom to develop an ultra-secure telecommunications satellite that ensures the secure and private exchange of sensitive information.”

PQC PILOT: Arqit Quantum has been selected to participate in the National Cyber Security Centre’s, post-quantum cryptography pilot. The pilot forms part of the Assured Cyber Security Consultancy Scheme. As a participant, Arqit has been assured to provide discovery and migration planning services to organisations preparing to migrate to quantum-safe technologies. The services will centre on Arqit’s encryption intelligence product, which is designed to help organizations discover, assess and manage cryptographic risk as they transition to quantum-resistant security.

SATELLITE LAUNCH: Sealsq (LAES) announced that its engineering team is working to support the next WISeSat satellite launch scheduled for November. This mission will mark the deployment of Sealsq’s post-quantum-ready satellites. The satellite will join WISeSat’s constellation of 22 operational satellites, which already provides secure IoT connectivity for industries worldwide.

QUANTUM ADVANTAGE: IBM (IBM) is in a favorable position in a new race concerning quantum advantage between Big Blue, Google (GOOGL), Microsoft (MSFT), and many startups. Christopher Mims of The Wall Street Journal reported. This race involves creating quantum computers that exceed the abilities of the best conventional one. Quantum computing, which may see a breakthrough in commercialization by 2030, gives the company a chance to reclaim some of its past glory, according to the article.

ANALYST COMMENTARY: Benchmark raised the firm’s price target on IonQ to $75 from $55 and reiterated a Buy rating on the shares. While not a lot of new information was provided at IonQ’s Analyst Day, the company laid out its roadmap in greater detail with convincing confidence in delivering on its aggressive 2M qubit target by 2030, the analyst tells investors in a research note. Benchmark anticipates the company will continue to pursue strategic assets to strengthen their lead in quantum computing and networking, developing a complete quantum ecosystem.

Lake Street lowered its price target on Quantum Corp (QMCO) to $10 from $20 and maintained a Hold rating on the shares. Since the launch of its standby equity purchase agreement in Q4, Quantum has raised $83M in net proceeds that the company has used to pay off its revolver and bolster its working capital, said the analyst, who adds that the downside of the SEPA is the dilution of the equity base. The firm is lowering its price target based on a higher share count and a lower forecast, the analyst noted.

B. Riley elevated the firm’s price target on IonQ to $75 from $61 and kept a Buy rating on the shares following the company’s analyst day. The firm believes IonQ is “far better positioned” than the stock currently reflects. The company offers technology leadership with “significant” commercial potential, the analyst told investors in a research note.

Cantor Fitzgerald increased its price target on IonQ to $60 from $45 and backed an Overweight rating on the shares. IonQ’s Analyst Day presentation outlined the company’s strategy to build the most powerful quantum computer, enabling commercial-scale quantum networks with post quantum cryptography, and global space- based quantum internet capabilities, the analyst noted. IonQ is in the early stages of commercializing its technology, and Cantor came away from the event with a positive view about the company’s roadmap to commercializing quantum computing and their potential leadership in the sector, the firm said.

After Honeywell announced last week that it had raised $600M in equity for Quantinuum at a valuation of $10B, Jefferies commented that this is twice the valuation of its January 2024 fundraise and implies about $7 per share in the firm’s sum-of-the-parts valuation of Honeywell given its 54% ownership stake. While Honeywell previously had stated plans to monetize Quantinuum as early as 2025, an IPO is likely shifting into the 2026 timeframe, added the analyst, who has a Hold rating and $240 price target on Honeywell shares.