In January, we initiated bullish coverage on SuperQ Quantum Computing Inc. (QBTQ.CN) (QBTQF) with a $10 target. The stock has dropped from $1.20 to around $1.00 since then, though it's up 10% today. This decline, while frustrating, makes the valuation proposition on QBTQ even stronger. Quantum and AI stocks continue to increase to extremely rich valuations in the United States. QBTQ has been overlooked for now while traders overpay for hot trading vehicles like Xanadu Quantum Technologies Limited (XNDU). We don't think that trend will last forever, especially as QBTQ jump started its revenue-generating phase in news announced today. While QBTQ might be down 20% in four months since our first report, it certainly hasn't tanked 60% in a day like XNDU after several days of being a high flier. If you chase value instead of hype, you won't leave yourself exposed to that kind of immediate and devastating loss. If you like our picks you can follow this blog by clicking the follow button on the top of the left hand panel. We have 1039 followers on here as well as 131 followers on our Canadian blog. You can also follow us on X @StockTradePicks which has over 5,000 followers.
Our previous report primarily focused on QBTQ's revenue potential through the growth of its subscription model of ChatQLM. While that is well underway, QBTQ achieved a big boost in near-term revenue by securing an agreement with AI Financial Corporation (AIFC). QBTQ will provide post-quantum security and compute tokenization to AIFC's digital asset infrastructure. AIFC is currently valued at around $140 million, but raised $1.5 billion last year in order to create a World Liberty Financial (WLFI) digital asset treasury. No revenue numbers are directly quoted in this release, just a reference to a "commercial agreement of significant size". Given the size of the treasury itself, a million dollar annual contract would represent just 0.07% of it. We think it is reasonable to assume that this contract is around this figure in the six or seven-digit range.
Why is this move not garnering more attention today? While a 10% move up is nothing to sneeze at, had this news been announced a year ago, we think it would have garnered a significantly more positive market reaction. AIFC has dropped from its $10 peak from a year ago, and took a $400 million unrealized loss on its cryptocurrency assets in 2025. This deal is a victim of poor market timing from a stock exposure perspective, but it's perfectly timed from the perspective of QBTQ growing a new market segment. If a company the size of Advanced Micro Devices, Inc. (AMD) can double in a matter of a few weeks on expected financial improvement, QBTQ is going to eventually do the same regardless of the initial market reception of the news. Numbers will dictate valuation. Smart investors are buying low or at least putting the stock on their watch list to monitor closely heading into future quarterly financial reports.
Hardships breed opportunity. AIFC is not alone in being a struggling digital asset strategy play that went from being valued well over its NAV at peak hype to below it today. There were many small cap companies that pivoted to various DAT strategies and raised a boatload of money to do so. As such, there is a plethora of companies for QBTQ to target. These companies are desperate to turn their fortunes around regarding their floundering stock prices and underlying crypto assets. Being proactive in the deployment of NIST-approved security in the face of hacking threats is one way to boost the perception of AIFC's business model. We point to AIFC's CEO stating the following in the news release:
"By partnering with SuperQ, AiFi is among the first to embark on the journey toward a quantum utility and security economy. Future-proofing our multibillion annual monetary flows and our strategic $WLFI treasury is a priority. Enabling decentralized computation and secure AI e-commerce is our competitive edge. This partnership sets a new benchmark for institutional digital assets, ensuring our infrastructure remains the safest harbor for capital and compute as we scale across borders."
We did not build in QBTQ's ability to service the crypto industry into our $10 target on QBTQ. However, given the current stock price and upside from current levels, we are comfortable leaving this target as is.
One final thing that we noticed that we think is very important to how QBTQ is going to be viewed by potential investors moving forward. We typed "QBTQ NIST" into Gemini and got the following results:
QBTQ is being portrayed as a company that has initiated the deployment and commercialization of NIST standard services. Unfortunately the AI is occasionally mixing up QBTQ with BTQ Technologies Corp. (BTQ), but the deal with AIFC which unambiguously belongs to QBTQ is now yielding results. Investors in QBTQ should also be aware that if the AI is confusing BTQ results with QBTQ, logic would dictate that the opposite flow will also be true. Those who are specifically searching for BTQ-related NIST activities will potentially be fed with QBTQ results. Further research will cause BTQ investors to stumble upon QBTQ accomplishments. Given that BTQ's market cap is over 20 times higher than QBTQ and that it has a NASDAQ listing, the cross-pollination of the two company's accomplishments will have a bigger impact on QBTQ. Both from the sheer number of investors and from the perception that QBTQ is a "near-peer" to BTQ but is valued at a small fraction of it.
Disclosure: We are long QBTQ.CN, We have been compensated to write about QBTQ through stock options, but have also engaged in open market buying.
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