The Government Just Fast-Tracked a Quantum Boom (4 Stocks to Watch)

There's a new catalyst sitting on top of the entire quantum computing sector right now and almost nobody's talking about it. And no, I'm not talking about the $2 billion government funding headlines you've already seen. I'm talking about two recent executive orders with actual deadlines attached. So, in this video, I'm going to break down the upcoming events that could spur a huge quantum hardware race. And since I want you to be able to take action today, I'm going to hand you a data-driven take on four different stocks sitting right inside of it, including a couple of pure plays like Righetti Computing and more. Hi, I'm Jacob Wade. I'm a financial coach that helps high-income earners retire early. And if you like timely financial news content just like this, just hit the thumbs up button below. It lets me know to keep making more videos just like this one. So, here's what actually happened. Now, recently the White House signed two companion executive orders on quantum technology. Now, one is about building quantum computing capability and the other, honestly the one that matters for this specific video, is about defending against it. It's called securing the nation against advanced cryptographic attacks. And the idea behind it is simple, but genuinely alarming if you actually think it through and look at the details. Almost everything sensitive on the internet, think banking, healthcare records, government communications, is protected by encryption today's computers just can't crack. A powerful enough quantum computer could. And adversaries don't have to wait for that computer to exist. They can steal encrypted data now and just sit on it until they can decrypt it. Security researchers call this harvest now, decrypt later. So, that order sets real deadlines here. Federal agencies and government contractors now have to migrate their most sensitive systems to quantum-resistant encryption, what's called post-quantum cryptography or PQC, by December 31st, 2030 for specific key systems and by the end of 2031 for digital signatures. And here's why that date actually matters more than it even sounds like it should. Under the prior administration, agencies were generally planning to make this switch by around 2035. This order moves the deadline up by roughly four to five years. That is not a minor tweak here. That's an entire industry getting told its timeline just got completely compressed. And it's not just federal agencies here. Government contractors, a huge slice of defense tech and cybersecurity, have to meet that same deadline to keep doing business with Washington. And by the way, finding these type of hidden news stories and keeping a pulse on the market is exactly what Steve Reiter our editor-in-chief here at Wall Street Zen walks through in his free Monday training sessions at 7:00 p.m. Eastern time. You could sign up for free at wallstreetzen.com/live or just scan the QR code on the screen right here and sign up for free. Now, here's where most coverage of this story stops and where I think it actually gets most interesting. Most people hear quantum deadline and they think about one thing, the companies building the actual quantum computers. IonQ, Rigetti, D-Wave, IBM, right? The hardware race. And yes, that's part of it, right? If Washington is racing toward quantum capability, the companies actually building the machines will benefit from that attention and that funding, but there's a pretty big problem with several of these big-name players. I'll get to that in just a minute. For now, what you need to know is there's a second side of this trade that almost nobody's covering and it might actually be the more investable one, the companies that have to build the defense side. Because every agency, every contractor, every company that touches federal data now has a hard deadline to overhaul its encryption. And that's not speculative, that's not someday, that's the exact compliance mandate that has a date attached to it. And compliance mandates create real immediate demand for the cybersecurity companies to do the work. So today, I want to walk you through both sides of this here. We're going to talk about two of the quantum hardware pure plays, and I'll be straight with you about where the Zen ratings model agrees with the hype and and where it doesn't here. Then we'll talk about the less obvious cybersecurity name that's actually built to benefit from this specific deadline. And I've got one more stock at the end. It's not a pure play, but one with real legitimate connection to this story that I think deserves a closer look. Now, I'm going to be talking about real stocks and real data here, but I'm not your personal investment advisor. All investment decisions are yours and yours alone. So, make sure to do your own due diligence before executing any trade. So, let's start with the side of the trade that everyone already knows about, the pure play. I'm going to share two that I think are worth watching, but with a few important caveats. Now, I'll start with one of the biggest names in the space, Rigetti Computing. The ticker symbol is RGTI. Now, Rigetti actually owns and operates its own chip fabrication facility, which is a real edge. Most quantum computing companies rely on outside partners to manufacture hardware, and Rigetti builds it in-house. Now, they're building superconducting qubits, the same basic approach as Google and IBM, so they're in serious technical company here. Now, analysts are pretty pumped on this specific stock. As of the week I'm recording this, some forecasts imply the stock could see a nearly 150% upside just in the coming year. But here's the butt. As I referenced earlier, there is an issue with most of these pure play stocks, and it's evident when you actually look at our quant rating system, which evaluates every stock on 115 factors to identify those most likely to outperform the market. The overall rating is expressed as a letter grade. Now, the Zen rating on RGTI is a C, a hold recommendation specifically from our model. Now, each rating is further broken down into seven component grades that look at key areas like growth, sentiments, and more. And when you look at the actual component grades of Rigetti, growth is the standout at a B. It's modest but real revenue growth. But value, momentum, and safety are all scored a D. And the AI grade here is an F. And here's something else that should give you pause. Insiders selling at Rigetti has been active in recent months. Directors and executives are selling shares, including a sizable sale from the company's own CTO. Now, when people close to the business are selling into strength, that's worth factoring in even when the broader Wall Street picture looks bullish. So, while Rigetti has real technical edge here and real government-adjacent story, the fundamentals just may not be there yet. So, what would need to change about this stock to warrant some serious consideration? Well, for one, the Zen rating needs to climb out of a hold and ideally to a B. I'd want to see that safety grade improve and the insider selling slow down. So, really until then, this stock is a watch only. And the case is going to be a bit similar for my next pick here. But don't worry, I am going to share some stocks with stronger fundamentals later on. So, keep watching. So, next up is going to be Quantum Computing Inc. Ticker symbol QUBT. Now, QUBT takes a different technical approach. Photonics instead of deep cryogenic cooling most quantum hardware needs, which in theory means it could scale more cheaply if the engineering holds up. Now, the reason I call this one a watch only, it's really a mixed bag in terms of fundamentals, catalysts, and coverage. So, let's dig in a little here. Now, revenue has jumped, but a lot of that came from two acquisitions the company closed on this year, not purely from organic growth. So, it's worth being precise when you look at the actual headline number knowing where it came from. And the company is still deeply unprofitable with a profit margin sitting in the negative triple digits. Now, here's the interesting wrinkle though. In April, five different company directors each bought roughly a hundred fifty thousand dollars worth of stock on the same day. That's a real cluster of insider buying. But, you zoom out to the full twelve months insiders have actually still sold more than they bought overall. So, it's something to watch. Now, as for analyst coverage, well, that part is exciting at least at first glance. The consensus recommendation is a buy and one price target indicates the stock has a two hundred and fifty percent upside potential in the coming year. But, dig a little deeper and you'll see the street high comes from one of the lowest ranked analysts that we track. So, take that with a grain of salt. And the Zen rating here is actually a D. A sell recommendation from our model, one notch worse than Rigetti. Growth is the one bright spot rated at a B, but everything else is rough. Value is an F, safety is an F, financials is an F, and AI is rated at an F. So, yes, it's an interesting technology and there's an actual insider buying signal worth noting, but the Zen rating is the worst of the two hardware names we've covered today so far. So, what would need to change to make this one an actual serious contender? Honestly, the Zen rating just has to climb out of the sell territory. I would want to see it at at least a B before I'm even interested. And I'd want the safety and financials grades to come out of F entirely. Until then, this one stays a watch list name. Now, for what you're really looking for, stocks sending out bullish signals right now. And real quick, if you're getting any value from this, consider subscribing to the channel. We do this kind of grounded data-driven research every single week and I'd love to have you back on the next video. So, just hit the subscribe button below and if you hit that bell notification, you'll get notified every time we put out a video. All right, now let's talk about the side of the story again almost nobody is covering here, the defense side. Now, remember this executive order doesn't just fund quantum computers, it forces a mandatory encryption overhaul across the federal government and every single contractor that touches that data. And listen, somebody has to actually build that. That's not a hardware problem, that's a cybersecurity problem. So, the first stock to discuss here is Fortinet, ticker symbol FTNT. This is a cybersecurity infrastructure company that sells the kind of network security and encryption tools that touch exactly the kind of compliance work we're talking about. Now, with every federal agency and contractor now racing to hit that quantum resistant encryption deadline, this is precisely the kind of company positioned to pick up that demand and the stock has already climbed over 100% in just the past 3 months. Yet, signs indicate that this impressive trajectory could continue. Five analysts that we track currently recommend FTNT as a strong buy with Shaul Eyal of TD Cowen, a top 5% ranked analyst based on historical stock picking performance, calling for nearly a 30% potential upside in the coming year. And unlike the hardware names that we've covered, the Zen rating actually likes what it sees here. Now, FTNT carries a Zen rating of a B which amounts to a buy recommendation. Now, if we look at the component grades, the standout is financials rated at an A and that's the one grade that none of the hardware pure plays came even close to touching. Now, momentum and sentiment are both Bs as well. This is a company our quant model actually trusts across multiple dimensions, not just one bright spot propping up a weak scorecard here. So, really here's the bottom line on Fortinet. This is the stock in today's video that best represents the less obvious half of this trade, the compliance and encryption overhaul that this executive order is forcing across the federal government and its contractors. Real profitability, a Zen rating that actually agrees with the fundamentals, even if Wall Street is a little more cautious in the near term on this. And by the way, if you like stock talk like this, can I once again remind you to just check out Wall Street Zen's no cost live training sessions. >> You can join our editor-in-chief Steve Right Meister on Mondays at 7:00 p.m. Eastern time. And he doesn't just talk about the stuff that he's buying, but how he's actually finding stocks. So, you can actually do the same in the days and weeks ahead. He also shares his trade of the week, combining the best of the Zen ratings with his 40-plus years of investing experience. So, again, if you're liking this type of content, I strongly recommend that you pause the video for a second and just scan the QR code on the screen right here and register for free or go to wallstreetzen.com/live. Again, you'll find the link in the description, you can scan the QR code, just pause for a second, register, and you can show up at the next one. We'll see you Monday at 7:00 p.m. Eastern. Now, I want to share one more pick with you and it might surprise you here. No, it's not a pure quantum computing play and it's not a pure cybersecurity play either, but it has a legitimate tie into the story that most of the coverage isn't really connecting. And trust me, you know this name, but you probably hadn't tied it specifically to quantum computing. I'm talking about Nvidia, yes, Nvidia, that Nvidia, ticker symbol NVDA. Now, the company isn't building quantum computers. I want to be clear about that. But, its GPU infrastructure and its CUDA Q software platform are the backbone that a lot of hybrid quantum classical computing research actually runs on today. Now, real quantum systems don't work in isolation, they need massive classical computing power sitting alongside them to be useful. And that's exactly the kind of infrastructure Nvidia already dominates. Now, again, I want to be clear that there's an adjacent connection, not a direct one here. Nvidia isn't a quantum stock, but it is infrastructure that quantum research increasingly depends on. And there's a live catalyst tying it back to everything we've talked about in today's video. Nvidia shares moved higher recently on reports that US government approved shipments of its H200 chips to China have begun. A reminder that this entire story, quantum computing encryption national security, and who gets access to advanced compute is all part of the same broader threat here. Export controls, national security policy, and technology leadership are increasingly in the same conversation. Now, not shocking, Nvidia has resoundingly bullish analyst coverage. Among the 25 analysts covering the stock, every recommendation is either a buy or a strong buy. With some price targets suggesting the stock could see over 130% upside from current levels, even after its monster run over the past few years. And the support this optimistic take. The on Nvidia is a B, amounting to a buy recommendation. Financials is the standout grade at an A. Value comes in at a B as well, which is notable for a company its size. Now, I do want to flag the one-week spot, honestly, is safety, which comes in at a D. That's worth knowing before you size any position in Nvidia. So, overall, this is the stock that I'm sharing in today's video where our model and Wall Street actually line up, where the fundamentals are the strongest of any of them that we've covered, and where the connection to this story, well, less direct here, is real and growing more relevant, not less. And again, the one honest flake here is the safety grade, which is worth factoring into how you size any position in Nvidia. So, here's what I'd actually do with all of this. Don't chase the hardware names just because they're loud and moving fast. The insider ratings on both Vergity and Quantum Computing are telling you the fundamentals haven't really caught up to the story yet. So, what I would do I'd just add them to your free watch list on wallstreetzen.com and then let the ratings and the insider activity tell you what changes and whether it's worth a closer look. But, don't ignore the quieter half of this trade, the cybersecurity and infrastructure names that are already positioned to benefit from a deadline that isn't going away. So, that's my take, but I'd love to hear from you. What do you think? Is the market sleeping on this compliance deadline? Do you think it's already priced into some of these stocks? Let me know in the comments below. And if you're interested in more stocks that have growth potential, check out this video right here on four small cap stocks that could become large cap stocks in the near future.