Zacks Article Touts QUBT's Q3 Progress, But DeepValue Report Exposes Fundamental Weaknesses

What happened

A Zacks article published in December 2025 highlights Quantum Computing Inc.'s (QUBT) purported strong Q3 progress, citing rising revenues, stronger margins, and a fortified cash position to drive commercialization momentum. However, the latest DeepValue master report, based on SEC filings including the Q2 2025 10-Q, reveals that QUBT's Q2 2025 revenue was only $61,000, with operating expenses of $10.2 million and a net loss of $36.5 million, indicating no material improvement in underlying financials. The report notes a cash balance of approximately $349 million as of June 2025, but this stems from equity issuances and is offset by persistent free cash flow deficits and an accumulated deficit of $220 million. Despite the optimistic news, which may reflect early-stage initiatives, the company faces high execution risks, intense competition, and uncertain timelines for quantum compute advantage, with broad monetization likely relying on post-quantum cryptography services in the near term. Thus, the positive narrative appears disconnected from the fundamental reality of minimal revenue, heavy losses, and a $1.5 billion market cap that remains unjustified without concrete commercial traction.

Implication

The Zacks article may create short-term optimism, but it lacks specific data to counter the DeepValue report's evidence of negligible revenue and substantial operating losses, reinforcing the SELL thesis. QUBT's fortified cash position provides a runway, but without a clear path to reducing cash burn or achieving material revenue growth, dilution risk persists and could further erode shareholder value. Near-term commercial potential hinges on post-quantum cryptography services, yet this area is competitive and dependent on ecosystem adoption, with no guarantee of significant recurring income. Key monitoring items, such as TFLN chip development and on-premises EQC deployments, remain critical but unproven, requiring execution success to de-risk the investment. Overall, until QUBT demonstrates sustained revenue growth and progress on its roadmap, investors are advised to maintain a skeptical stance, as the current valuation appears speculative and disconnected from fundamentals.

Thesis delta

The investment thesis remains unchanged; the SELL recommendation is reinforced because the Zacks article does not provide evidence of material revenue improvement or reduced execution risks. Investors should await tangible milestones, such as significant sequential revenue growth or successful TFLN chip integration, before considering a shift to HOLD or BUY.