Quantum Leap: Why one analyst believes IBM has ingredients to win in quantum

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

WORKFLOW OPTIMIZATION: D-Wave Quantum (QBTS) and BASF announced the completion of a joint proof-of-concept project that used a hybrid-quantum application to optimize manufacturing workflows in a BASF liquid-filling facility. The hybrid-quantum technology set a new benchmark for manufacturing efficiency, allowing reduction of production scheduling time from 10 hours to just seconds. The BASF liquid-filling facility processes, fills and seals a significant number of bottles of liquid a month across several different products. The company said, “The facility operations are highly complex and must be carefully timed and coordinated, from the arrival of tanks with liquid materials until the final products ship. Even the smallest delay could disrupt filling schedules, increase costs, and disrupt timely product deliveries. These challenges often exceed the capabilities of classical-only optimization technology to support rapid decision making in case of operational breakdowns and efficient operations, at scale. BASF collaborated with D-Wave to build and test a hybrid-quantum application designed to improve efficiency in a production facility. The application was designed to minimize the total setup time required to switch between products, reduce the time to fully offload each tank, and minimize the overall tardiness of products relative to their scheduled due dates. The application was tested in a real-world production scenario to optimize task scheduling and liquid tank assignments while meeting business and quality requirements. The hybrid-quantum application outperformed an existing optimization solution across key operational metrics, reducing lateness by 14%, reducing setup times by 9%, and shortening tank unloading durations by up to 18%.”

SAF COLLABORATION: WISeKey (WKEY) and Sealsq (LAES) provided an update on the evolution of its collaboration with the Swiss Armed Forces. This partnership, initiated in 2022, continues to advance Switzerland’s sovereign space and cybersecurity infrastructure by combining IoT satellites with digital identity and post-quantum cryptographic technologies. Since the signing of the initial agreement, WISeSat.Space and the SAF have jointly conducted research, development, and mission testing on small-satellite and secure communications capabilities, including Low Earth Orbit IoT and Internet of Battlefield Things applications. The collaboration has now evolved to integrate Sealsq’s post-quantum semiconductors and WISeKey’s Swiss Root of Trust, ensuring quantum-resilient encryption and authentication for satellite-to-ground and inter-satellite communications.

AUTOMOTIVE SAFETY SOLUTIONS: Sealsq announced a new initiative leveraging the expertise of its subsidiary IC’Alps to develop integrated cybersecurity and functional safety solutions for the global automotive industry. The company said, “This initiative aims to position Sealsq at the forefront of protecting next-generation autonomous and connected vehicles against emerging cybersecurity threats. Autonomous and software-defined vehicles are becoming highly interconnected digital platforms, relying on over-the-air updates, vehicle-to-everything communication, and advanced sensor fusion capabilities. However, classical cryptographic systems, such as RSA and ECDSA, are vulnerable to future quantum computer attacks, which could compromise vehicle control systems, data integrity, navigation, and safety.”

TEAM PARTNER: Sealsq also announced that BWT Alpine Formula One Team has welcomed Sealsq as team partner, with the partnership commencing ahead of the 2025 Las Vegas Grand Prix this November.

ANALYST COMMENTARY: Morgan Stanley raised the firm’s price target on IonQ (IONQ) to $58 from $32 and reiterated an Equal Weight rating on the shares ahead of the company’s report due after the market close on Wednesday, November 5. The firm is expecting upside to revenue and “a bullish outlook” from management around recent news after the Trump administration signed two technology development agreements with the UK, Korea, and Japan that call out quantum specifically. All of those are geographies where IonQ has a footprint, the analyst noted in a preview.

B. Riley downgraded Rigetti Computing (RGTI) to Neutral from Buy with a price target of $42, up from $35. The firm believes delayed U.S. government funding authorizations bring sales risk to Rigetti. After a 190% share rally year-to-date, the stock is pricing in a significant percentage of long-term commercial success, the analyst tells investors in a research note.

After having spent a day at IBM‘s (IBM) quantum lab and meeting with Jay Gambetta, Director of IBM Research, Melius Research reiterated a Buy rating on the shares, telling investors that IBM has the most quantum computers in use today, “by far,” and arguing that its potential in quantum “looks like it could amount to billions of high-margin annualized revenue” starting in 2029. The “Starling” line of quantum computers has the potential to unlock capabilities to run revolutionary applications on a 200 qubit platform with an error correction rate that “finally allows this technology cross the chasm,” according to the analyst, who added that IBM seems to have “the ingredients to win in Quantum since it arguably has the best hardware roadmap and the mindshare of developers with its Qiskit platform.”