Why Shares of Arqit Quantum Were Up Nearly 11%

(TheFool) Shares of next-gen encryption-software Arqit Quantum (NASDAQ:ARQQ) were up 10.9% as of market close Wednesday, according to data provided by S&P Global Market Intelligence. Arqit, which just went public via a SPAC merger at the start of September, is currently double the price it was when it made its publicly traded debut, but is half its peak valuation in mid-September. Suffice it to say, this has been a wild ride higher for shareholders who bought in early.
Arqit currently boasts a market cap of over $2.3 billion, a sizable valuation for a fresh software business like this. As the name implies, this stock is a bet on the nascent quantum-computing industry.
Arqit has developed what it calls the QuantumCloud encryption service, built to protect data and digital assets (including cryptocurrencies like Bitcoin and other blockchain-based assets) on the internet from the threat a quantum-based cyber attack might pose one day.
It’s not just protection from a sci-fi-sounding future that has some investors excited about Arqit stock. The company says it’s working with a few dozen multinational companies and government agencies, with $130 million in revenue under contract and an additional pipeline of $1.1 billion.
However, new SPAC IPOs like this sometimes get hot after going public, only to quickly come back down to reality. With minimal actual sales to speak of right now, Arqit Quantum’s current valuation assumes its lofty projections over the coming years transpire.
Don’t rush in on the hype. But if quantum computing interests you, this is a rare pure-play stock in this futuristic industry to keep tabs on.