The Government Just Bet $2 Billion On Quantum... These 2 Stocks Are Next

Last year, the United States government started doing something it never used to do: taking ownership in private companies. Instead of the usual grants and federal subsidies, Uncle Sam got real equity. This government quantum computing investment signals exactly where the smart money is flowing, and it just got a whole lot bigger.

You cannot buy the main target of this funding. But you can buy the tiny supply chain companies making the technology physically possible.

Government Quantum Computing Investment Is Moving Stocks

Intel, MP Materials, Lithium Americas. Each company controlled an output the administration viewed as strategically critical, and each gave the government stock in exchange for federal support. Each stock made a huge move higher following the announcements.

When the Pentagon started writing checks for rare earths and critical minerals, the companies on the receiving end of that money ran hard. The government deal in MP Materials was announced in July of last year. The stock quickly went from $30 to $90. It tripled in just three months.

USA Rare Earth made a big move as well. The entire Rare Earth and Strategic Metals ETF doubled in 90 days.

Today, we are looking at the exact same setup in a brand new sector.

Where Did the Government's $2 Billion Quantum Investment Actually Go?

The government just took new stakes in nine private companies, all in a single industry: quantum computing.

But the biggest check, the one worth about a billion dollars, didn't go to one of the flashy quantum names everyone has been buying. It went to a brand new chip foundry that was recently spun off from IBM. The company is called Anderon.

There is just one problem: you cannot buy it. It is private.

A lot of investors are simply piling into the big three or four quantum stocks, hoping to ride the momentum of a sector that has just been dubbed mission critical. I think there is a better way.

The Picks and Shovels Play

The better approach is backdoor investments into the picks and shovels stocks, the ones making critical components in the quantum computing supply chain that are publicly traded, ones we can buy today.

A quantum computer is the most fragile machine humans have ever built. To work, the chip has to be cooled to colder than deep space. We are talking about a fraction of a degree above absolute zero. That is colder than the dark side of the moon, colder than anything in nature.

To get an environment that cold, you need a special refrigerator that runs on a rare gas called helium-3. You also have to build the chips out of ultra-pure materials so the qubits don't fall apart. Every quantum computer works this way.

Instead of betting on who builds the best computer, I am betting on the infrastructure. The gas that cools it and the materials that go inside it. Demand is about to explode, and supply is tiny.

Two Stocks Under $10

I found two quantum supply chain stocks trading for less than $10 a share. These are real companies with real products and real revenue. They are just younger and in an early stage of growth.

ASP Isotopes (ASPI)

This company makes the guts of the machine. ASP Isotopes enriches the special materials a quantum computer is built from. They manufacture two specific things that matter here:

• Silicon 98: An ultra-pure form of silicon that lets engineers build qubits that hold their state longer and make fewer errors. If you want a quantum computer that actually works, this is the kind of material you need.
• Helium-3: The rare gas those sub-zero refrigerators cannot run without.

Helium is not rare, but helium-3 is. The helium-3 shortage is so bad that companies are signing contracts to one day mine it on the moon. That is not an exaggeration. ASP Isotopes is building helium production here on Earth, expecting their first capacity to come online in the third quarter of this year.

This was a $14 stock back in October and dropped to $4 by March. Why so volatile? Last quarter, they did about $4 million in revenue. It is small, it is early, but it is exactly the stage you want to find these. The trend since then is pretty clear. Sure, it is a bit choppy, but without question, this thing is trending higher. Signs of consolidation, buyers stepping in, pullbacks getting shallower. Six months ago it was at $14. This thing could easily be $18 or $20 a share.

I picked up around 5,000 shares, looking for this to push higher.

What Are the Biggest Risks in Quantum Computing Stocks Right Now?

The same machine that will cure diseases and crack impossible math problems is also going to break the encryption that protects bank accounts, crypto wallets, and every government secret on the planet.

A powerful enough quantum computer cracks today's security codes in seconds. The bad guys already know it. They are executing a strategy called "harvest now, decrypt later." They are stealing encrypted data today, sitting on it, and waiting for a quantum computer powerful enough to crack it open in the future.

The entire world is going to have to rip out its old security chips and replace them with new quantum-resistant ones. In my opinion, this threat is one of the reasons cryptocurrencies have done so poorly for the last year.

SEALSQ (LE)

SEALSQ makes exactly what the world needs: quantum-resistant security chips, the Shield. This is not some idea on a napkin.

It trades around $3 a share. I entered a position of 10,000 shares at $3.10.

The chart tells an interesting story. There is a significant level right around $4 a share. After a big run up to $8, it crashed down to $4. That $4 level was support for almost a year. It then cracked below and has since served as resistance.

When this stock gets above $4, it really opens up to the upside. We are seeing higher lows, higher highs, and shallowing retracements. The smart money is out there gobbling up shares and building a position. At a minimum, if this starts running, we could see a move to the $5 mark. If it proves to be a critical player in this space, we are talking $8, $10, potentially $12 a share or higher.

The Setup Is Clear

The government just put $2 billion on the table. They clearly think quantum computing is important. The materials are real. The security threat is real. Both of these companies are actually selling product today, not just promising it. This level of government quantum computing investment tells us exactly where the priorities are.

If history is any indication, if this plays out like rare earths, like semiconductors, like the other times the government took a stake in a company's success, these stocks could easily double or triple from here.

Most investors will continue fighting over the same handful of quantum names. Meanwhile, the government quantum computing investment just told us where the money is going.

These two little companies are sitting right in the path of it. Keep in mind that small caps are typically more volatile. To fund their growth, they will sometimes issue more stock and dilute. The quantum story is still early and the revenue is still small relative to the hype, but the demand is not hype. The setup is clear.