Can IBM's HRL Acquisition Boost Its Quantum Computing Capabilities?

International Business Machines Corporation IBM has completed the acquisition of HRL Laboratories, strengthening its position in quantum computing and related advanced technologies. The deal adds expertise in quantum sensing, materials science, electronics and manufacturing to IBM’s existing capabilities and supports its efforts to develop scalable quantum systems.

Per the transaction, IBM will integrate HRL’s expertise in silicon-spin qubits, complementing its superconducting quantum computing approach. The company can also leverage HRL’s capabilities in quantum materials, cryogenics, control electronics, packaging and interconnect technologies to advance its quantum hardware roadmap and support innovation across the quantum technology stack.

The acquisition supports IBM’s investments in quantum manufacturing and infrastructure. HRL’s silicon-based technologies could enable collaboration with Anderon, IBM’s pure-play quantum wafer foundry, to explore scalable manufacturing methods and improve development across different quantum computing technologies.

The company is progressing its fault-tolerant quantum computing roadmap through advances in hardware, error correction, software and algorithms. IBM expects Quantum Starling to perform 100 million quantum operations by 2029, followed by Blue Jay, a next-generation system targeted for the mid-2030s. These developments are likely to support IBM’s long-term growth in advanced computing and quantum technology.

How Are Competitors Advancing in Quantum Computing?

IBM faces competition from Microsoft Corporation MSFT and Alphabet Inc. GOOGL. Microsoft is expanding its quantum computing ecosystem through Azure Quantum, providing access to hardware, software and simulation tools. The company is developing quantum applications for chemistry, materials science and optimization. Microsoft is exploring the integration of quantum computing with AI to solve complex scientific and computational challenges.

Alphabet is advancing quantum computing research through Google Quantum AI, combining superconducting and neutral-atom technologies to pursue scalable quantum systems. The company is advancing neutral-atom hardware and quantum error-correction research to improve the reliability of future quantum computers. Alphabet is adopting post-quantum cryptography to strengthen its systems against potential security threats from future quantum machines.

IBM’s Price Performance, Valuation & Estimates

IBM shares have lost 3.3% over the past year against the industry’s growth of 197.5%.

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From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.07, below the industry average of 5.15.

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Earnings estimates for 2026 have declined 0.3% to $12.33 over the past 60 days, while the same for 2027 have decreased 1.6% to $13.22.

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IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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