By Mackenzie Tatananni
As the enthusiasm for quantum computing reaches new heights, it's getting harder to find an analyst who isn't jumping on the bandwagon.
Northland Capital Markets analyst Nehal Chokshi on Monday became the latest to launch coverage of several quantum stocks, including bullish calls on some of the newest entrants into the public market.
Of the publicly traded pure-plays -- meaning, companies focusing their efforts solely on quantum -- Chokshi believes IonQ is most likely to achieve broad quantum advantage by 2030. He rates the stock at Outperform with a $55 price target, suggesting 14% upside from Monday's closing price of $48.32.
While there isn't a single, agreed-upon definition for quantum advantage, it generally refers to quantum systems' ability to outperform classical computers at a range of tasks, doing so more efficiently, accurately, and inexpensively. Chokshi noted that IonQ is one of a handful of companies meeting the 99.9% two-qubit gate fidelity threshold, making it a top contender to achieve quantum advantage.
In 2024, privately held Quantinuum became the first in the industry to achieve the milestone, with IonQ subsequently crossing the "four nines" threshold with the achievement of 99.99% fidelity in October. Fidelity is essentially a measure of accuracy that gauges how reliably a quantum system calculates the correct outcome.
There are two types of qubits: physical qubits, which function as the hardware that stores information but are prone to errors, and error-corrected logical qubits. The 99.9% benchmark here refers to physical qubits.
"We agree with multiple quantum computing companies that assert that the current key metric to gauge is logical qubits," Chokshi wrote. However, most companies demonstrating logical qubits haven't stated their error rates, making comparisons difficult.
Chokshi may be betting on IonQ, but he believes Xanadu Quantum Technologies, one of the newest entrants into the public market, has an even more compelling growth narrative. The company is capable of leveraging a type of qubit that offers built-in error correction.
On a broader scale, Xanadu aims to lead in photonic quantum computing, which uses light particles to carry and process information. And unlike the superconducting loops favored by International Business Machines and Google, which must be chilled to temperatures colder than deep space, photonic interconnects can operate at room temperature.
Seeing as they're comparatively easier to scale and relatively stable, the technology might seem ready for commercialization today. But photonic loss, the sudden disappearance or absorption of photons, is a persistent sticking point for now.
Xanadu's modality wins the company points in Chokshi's book. He rates the stock, which has been listed on the Nasdaq for less than a month, at Outperform with a $43 price target. Shares closed at $27.63 on Monday.
Chokshi also rates New Jersey-based Quantum Computing at Outperform. It's a strong vote of confidence for a company that has attracted scrutiny from multiple short sellers. Still, Chokshi is a fan of its quantum architecture, noting that the company "is pursuing the ambitious path" of building a photonic quantum computer that uses thin film lithium niobate.
While the analyst fell short of recommending investors sell any quantum stocks, he rates both Rigetti Computing and D-Wave Quantum at Market Perform. Both players went public in 2022, just months apart.
Chokshi expects Rigetti and D-Wave "will have their niches" in the industry. D-Wave, for one, has built its reputation as a leader in annealing quantum, which is best suited for optimization tasks and less broadly applicable than gate-based quantum.
The company was exploring gate-based models early on, but abandoned those efforts in favor of differentiating itself through its focus on annealing, which has since become its bread and butter. In 2021, the company relaunched those efforts, and has since acquired Quantum Circuits, a start-up focused on gate technology.
Chokshi believes D-Wave's market opportunity will be limited "if recent movement into gate based quantum computing proves too late." Still, with 86% adjusted gross margins in 2025, the company is also proof of the customer demand for systems today, the analyst added.
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.
(END) Dow Jones Newswires
April 21, 2026 15:34 ET (19:34 GMT)
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