Technological leadership yet undervalued! Quantinuum (QNT.US) upgraded by Morgan Stanley to "Overweight" and named a top pick in the quantum computing sector.

Morgan Stanley upgraded quantum computing company Quantinuum (QNT.US) to "Overweight" from "Equal Weight," lowered its price target to $62 from $78, and named it a "top pick" in the sector. As of press time, Quantinuum rose nearly 5% in Thursday's U.S. pre-market session. Morgan Stanley analysts wrote in a note to clients: "By 2040, quantum computing could open up a market worth more than $100 billion, but differing hardware technology routes make it difficult to compare companies, and current revenue scales remain too small to distinguish their relative merits." The analysts said: "We have built our own proprietary assessment framework that examines what companies have already achieved across four main areastechnological progress, execution capability, manufacturability, and broader progress indicators. Currently, we assign the highest weighting to technology, because in this field the available evidence is the most substantial and the differences among companies are the most pronounced." The analysts added: "Quantinuum stands out in terms of technology and execution capability. Among pure-play targets focused on quantum computing, the company is the most advanced and has the best execution record, yet the market assigns it the lowest valuation multiple across the entire peer groupthe lowest multiple based on 2030 revenue forecasts." The analysts further noted that Quantinuum has made the "most leading" progress in error-correction frameworks in quantum computing, and has the best execution record. However, the analysts pointed out: "Quantinuum's current share price implies a visibility factor of only about 43%, the lowest across the entire peer group, while our assumed factor is 75%. IonQ has a slight edge in manufacturability, so its visibility factor is relatively close to Quantinuum's. However, for Quantinuum, the gap between our judgment and market pricing is much wider." The analysts also said that the upcoming quantum computer Sol will be Quantinuum's next catalyst, with the product planned for release next year. In addition, the analysts maintained their "Equal Weight" rating on IonQ (IONQ.US) and initiated coverage on Infleqtion (INFQ.US) and Xanadu (XNDU.US), both with "Equal Weight" ratings.