Already the leader in on-premises sales, IQM is poised to widen its advantage as it capitalizes on the convergence of artificial intelligence and quantum computing.
That's the view of TD Cowen analyst Krish Sankar, who launched coverage of IQM shares with a Buy rating and no price target on Friday. The company's American depositary receipts rose as much as 6.4% in premarket trading following the initiation.
Sankar styled IQM as a European pioneer embarking on its overseas expansion. To date, the company has 28 on-premises system sales under its belt, putting it ahead of formidable industry peers like International Business Machines. This track record has helped IQM gain credibility as a relatively recent entrant into the public markets.
IQM is set to begin shipping Halocene, its latest and most powerful system to date, next year-a milestone Sankar expects to drive broader adoption across customers in government, high-performance computing, and academia.
Sankar concedes that commercial traction "is still in early innings," though he expects the adoption of quantum technology to rise in 2027 as engineers make further progress on error correction. Unlike traditional bit-based systems, quantum computers are particularly sensitive to environmental noise, and scaling them tends to increase the incidence of mistakes. The Halocene platform is specifically tailored to advance research into quantum error correction, according to IQM.
As error-correction decoding algorithms run directly on classical machines, this means quantum must be intertwined with existing infrastructure rather than outright replacing it. The industry is striving toward a hybrid computing model that integrates quantum processors with traditional GPUs and CPUs, as evidenced by IonQ's latest agreement to deploy its processors at Nvidia's research center.
For IQM, Sankar sees strong growth opportunities in the HPC and AI data-center markets. Investors are already seeing quantum establish an early foothold here: IQM has installed on-premises systems at four of the world's top 10 supercomputing centers and is scheduled to deliver a system to a state-backed HPC center in Finland this fall.
Sankar noted that IQM's native Europe hosts roughly a quarter of the world's highest-performing supercomputers, while Asia holds roughly 30%. Because IQM already secured its first major U.S. contract with Oak Ridge National Laboratory in the third quarter of 2025, the analyst sees significant runway for the company to capture market share abroad.
However, the outlook isn't entirely rosy. While IQM is sufficiently capitalized for now, Sankar expects the company to require additional funding in 2028. IQM has roughly $360 million in cash on its balance sheet following the blank-check merger that took it public in July, as well as an upsized private investment in public equity (PIPE) transaction the month prior.
If IQM successfully raises additional funds, Sankar believes the company will be ready to sell its systems to enterprise customers on a broader, regular basis before the end of the decade. However, it's a tall order-IQM has raised an estimated $950 million this year, trailing the $1.4 billion average for sector peers D-Wave Quantum and Rigetti Computing. Honeywell-backed Quantinuum has fared even better, raising $2.9 billion.
Like IBM and Google, IQM is pursuing superconducting quantum computing-one of the oldest quantum modalities-which uses electrical circuits cooled to near absolute zero to build quantum bits. While the industry consensus for now is that multiple modalities will coexist, Sankar flagged the competing trapped-ion approach from Quantinuum and IonQ as a threat to IQM's market share.
In light of these pressures, IQM "will need to invest further in developer tools and talent to win and support growth from high volume enterprise customer accounts," Sankar wrote. The company certainly has its work cut out for it, but in a commercial market that is just starting to take shape, Sankar remains hopeful IQM can maintain its early lead.