Quantum firms race to market as the industry sees ‘inflection point’

One such firm, Xanadu Quantum, which builds quantum computing hardware and software, began trading on the Nasdaq and Toronto Stock Exchange on Friday, rallying 15% in the U.S. after a rocky start in public markets. 

Xanadu — a quantum partner of chip giant Nvidia — debuted after merging with Crane Harbor Acquisition, a Special Purpose Acquisition Company (SPAC), also known as a ‘blank-check firm.’

A SPAC is a shell company created specifically to raise capital through an initial public offering, and they have become a common route for quantum startups to list. 

Xanadu’s listing came a week after Singapore-based quantum software company Horizon Quantum began trading following its merger with blank-check company dMY Squared Technology Group. 

dMY Technology Group took IonQ public in 2021 through a merger with one of its shell companies, making it the first publicly traded, pure-play quantum computing company.

Since then, SPACs, which offer a quicker path to listing with less regulatory scrutiny, have become a popular path for quantum companies looking to launch an initial public offering.  

Quantum computing uses the principles of quantum mechanics to process information in ways classical computers cannot, with potential applications spanning across drug discovery, materials science, cryptography and more. While the technology remains experimental, it is widely expected to have a transformative impact on computing.

Despite ending its first day higher, the Nasdaq-listed shares of Xanadu fell over 10% in after-hours trading, while Horizon Quantum has dropped around 18% since its debut.

Meanwhile, neutral atom quantum computing company Infleqtion, which debuted on the New York Stock Exchange on Feb. 17 through a blank-check deal, has seen its stock plunge by more than 30%.

Still, companies appear willing to brave these volatile markets to capitalize on recent industry breakthroughs. 

“It’s an interesting time to be entering the public markets, of course, with everything happening in the world … But for quantum computing, it’s actually a very ideal time to be coming out,” Dr. Joe Fitzsimons, the founder and CEO of Horizon Quantum, told CNBC. 

“We’re really starting to hit something of an inflection point,” he said, adding that there has been a significant number of breakthroughs that have occurred over the past 18 months. 

In 2024 and 2025, several companies and research groups demonstrated improved quantum error correction, a key requirement for building reliable machines.

Other milestones include higher qubit counts — which increase the potential size and complexity of problems a quantum computer can represent and help solve — and coherence times, which allow more reliable computations by reducing the impact of noise and errors.

“The first demonstrations of practical quantum advantage are expected at around 100 logical qubits — a threshold the industry is approaching by 2028-2029,” Velu Sinha, partner, Bain & Company, told CNBC. 

“But for commercially impactful applications like drug discovery or large-scale logistics optimization, you need 1,000 to 10,000 logical qubits, which is more likely mid-2030s,” he added.

This so-called “quantum advantage” refers to the theoretical milestone in which quantum computers solve real-world problems faster, more efficiently, or more accurately than the best-known classical supercomputer. 

Early commercial applications are also emerging in areas such as optimization, financial modeling and chemical simulations.

“The time was right [to go public] because quantum, and especially neutral atoms, is moving from scientific progress toward commercial relevance,” Matthew Kinsella, CEO of Infleqtion, told CNBC. 

“Going public gives us the capital to accelerate commercialization and invest behind the markets where we already see customer demand, he said, adding “we think commercialization will happen in stages.”

For smaller quantum upstarts, near-term revenue opportunities are key to securing investor support for their long-term research.

Horizon Quantum Computing, for instance, has focused on developing software tools that can run on both classical and quantum systems, positioning the company to generate revenue before large-scale quantum hardware becomes viable. 

The company’s CEO said newly raised funds will be used to expand its research team and roll out an early iteration of its software to early access users this year. 

Xanadu Quantum has also invested in cloud-based platforms that allow developers to pay to experiment with quantum algorithms using existing hardware.

The United States, China and the European Union have committed billions of dollars to quantum research and development, aiming to secure strategic advantages in computing and cybersecurity.

Those government initiatives have often focused on or included support from universities and national laboratories.

However, the latest wave of public listings underscores how the industry is shifting from academic and public research toward commercial markets, even as timelines for widespread adoption remain uncertain.

“Quantum computers are going to be able to do trillions of computations instantaneously, and that will absolutely revolutionize the way we act with computing,” said Marc Einstein, research director at Counterpoint Research. 

The day when individuals have quantum computers in their offices or homes may be decades away, Einstein said. But a future in which large organizations own the machinery and provide quantum computing services could arrive much sooner, he added.