International Business Machines Corp (NYSE:IBM) shares are on track to close the week nearly 18% higher after the US Department of Commerce's $2 billion quantum computing investment package, which Wedbush analysts called a significant new catalyst for the industry.
IBM confirmed it would work with the US government to develop the country's first quantum chip foundry, with the Commerce Department committing $1 billion and IBM matching that figure with its own capital.
Wedbush noted that while IBM's quantum development timelines remain unchanged, the government's involvement provides a more stable pathway to advance quantum computing development.
The firm highlighted CEO Arvind Krishna's projection that the quantum business could generate billions of dollars in annual sales with high profit margins in the mid-2030s, with deals for quantum seen as right around the corner.
IBM is making steady progress toward introducing an error correcting decoder in the Starling proof-of-concept by 2028 and delivering the first fault-tolerant computer in 2029, with more proof points around tangible use cases now being published.
Wedbush also pointed to IBM's broader quantum momentum. At IBM Think a few weeks ago, the company stated it is in the early innings of unlocking benefits at the crossroads of AI and quantum, with quantum advantage expected to be reached later this year.
IBM has over 80 quantum computers built and more than 300 partners in its quantum network, and has recorded over $1 billion in signings since launching its quantum partnership program.
IBM estimates quantum computing will be a $1 trillion value creation engine over the next decade, with the market for quantum tech providers expected to represent 20% of that figure.
Wedbush believes that IBM's positioning at the forefront of AI and quantum remains underappreciated, noting that quantum computing can uncover what AI cannot yet compute, which the firm views as a foundation for accelerating future AI capabilities.