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Last Thursday, the Department of War rolled out a package of new quantum initiatives. The goal is to figure out which companies can build a quantum computer powerful enough to matter for national security, and then help them build it in America.
About $200 million is new DARPA funding for four companies. They just advanced to Stage C of the Quantum Benchmarking Initiative. That’s the final stage of a program launched in 2024 to separate real progress from hype. The other $150 million is a conditional loan to PsiQuantum (private) to expand its U.S. manufacturing and prototyping.
The four new Stage C companies:
- IBM (NYSE: IBM) — superconducting processors
- IonQ (NYSE: IONQ) — trapped ions
- Atom Computing (private) — neutral atoms
- Diraq (private) — silicon spin qubits
They join Microsoft (Nasdaq: MSFT) and PsiQuantum, which reached Stage C earlier through a pilot program. That’s six finalists out of more than 20 companies DARPA has evaluated.
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Stage C is where the government stops reviewing plans and starts testing hardware. DARPA engineers will check whether each machine can be built as designed and performs as promised.
The commitments are getting specific. IonQ says its Stage C agreement carries a potential value of up to $300 million. DARPA will validate multiple generations of IonQ’s systems through 2029. IBM expects to deliver its first fault-tolerant quantum computer that same year.
Not everyone made the cut. Quantinuum (Nasdaq: QNT), which went public in June, was left off the list. Its shares fell about 6%.
The line that stood out to me most came from DARPA’s program director. “We increasingly expect that someone will build a utility-scale quantum computer by 2033.” That means a machine whose computing value exceeds its cost.
A few years ago, the standard line was that useful quantum computers were decades away. Now the Pentagon’s own evaluators are putting a date on it: seven years out.
Oddly, the stocks didn’t celebrate. IonQ has fallen in recent trading sessions – and it’s now trading below $37 per share. That’s nearly 50% below where it was after the June executive orders. Wall Street’s average price target sits near $70.
Validation keeps piling up while the share price moves the other way. For patient investors, that’s an interesting setup.
I’ll be watching IBM, IonQ and Microsoft closely as DARPA’s testing gets underway.
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Ian Wyatt
Editor, Daily Profit