Cantor Daily Research Highlights

Research evidence excerpt

Cantor Daily Research Highlights

uantinuum Inc. with an Overweight rating and a $90 price target. While the quantum computing

industry is still in its infancy, Quantinuum envisions a hybrid compute world of classical compute (CPUs), accelerated compute

(GPUs), and quantum compute (QPUs), with quantum computing as the foundational layer. As a result, the company has

purposely designed its systems for a hybrid compute architecture by providing a full-stack quantum solution - hardware,

middleware, and application software designed to provide solutions to real-world problems. As its quantum hardware

systems advance toward quantum advantage, the number of real-world applications expands, adoption gains traction, and

the quantum ecosystem grows. With this evolution, Quantinuum's revenue mix is expected to shift more toward software

and services than toward hardware sales. In turn, gross margins are expected to expand due to a shift in the revenue mix

and operating leverage from the absorption of fixed costs.

Generate value with a full-stack offering in a hybrid compute environment. The vertically integrated quantum computing

platform, comprising hardware and middleware with application software, enables the hybrid quantum-classical computing

workflow. Under this framework, Quantinuum works closely with customers and partners to build new hardware and

software capabilities, which enable the company to create and capture value. Quantinuum’s approach to capturing value is

to retain proprietary assets while licensing open-source assets to accelerate developer adoption and expand the ecosystem.

By selling differentiated hardware with a rich developer platform, Quantinuum seeks to create a large developer ecosystem,

largely driven by its Nexus platform.