The Quantum Computing Hype Cycle and What It Means for the Valuation of Cybersecurity Stocks

The era of quantum computing is rapidly moving from science fiction to reality, fundamentally altering the landscape of global cybersecurity. By 2025, the risk that quantum computers could undermine traditional encryption methods such as RSA and ECC is growing, fueled by progress in both algorithms and hardware. This evolution brings two urgent challenges: reducing immediate vulnerabilities in current encryption systems and pinpointing undervalued companies specializing in quantum-resistant technologies that are set to thrive as post-quantum cryptography (PQC) becomes standard.

Immediate Threats Facing Traditional Encryption

The potential for quantum computers to defeat classical encryption depends on the creation of a cryptographically relevant quantum computer (CRQC)—a machine with sufficient stable qubits and error correction to effectively run Shor’s or Grover’s algorithm. Although such a device is not yet operational, recent advancements have shortened the expected timeline for its arrival.

• Algorithmic Breakthroughs: In 2025, Craig Gidney’s research slashed the number of qubits needed to break RSA-2048 from 20 million to less than 1 million, bringing the anticipated “Q-Day” much closer.
• Hardware Progress: Google’s “Willow” initiative in 2024 achieved scalable logical qubits using surface code error correction, marking a significant milestone toward practical quantum computing.
• Regulatory Momentum: The U.S. National Institute of Standards and Technology (NIST) has approved three quantum-resistant algorithms (FIPS 203, 204, 205), with worldwide adoption likely to accelerate by 2030.

The “harvest now, decrypt later” (HDNL) approach—where adversaries collect encrypted data now to decrypt it with future quantum computers—has become a major catalyst for urgent action. Governments and intelligence organizations are already amassing sensitive information, making the shift to PQC increasingly critical.

Quantum-Safe Investment Opportunities

Despite the seriousness of the threat, the quantum-safe technology sector remains fragmented and undervalued. Most publicly listed companies in this field are either early-stage innovators or specialized players with uncertain revenue prospects. Still, the pressing need for quantum-safe solutions presents a rare chance for investors to back firms with solid technical expertise and clear commercialization strategies.

SEALSQ Corp (NASDAQ: LAES): The Financially Robust Front-Runner

SEALSQ distinguishes itself as the leading quantum-safe company, boasting strong finances and a transparent path to revenue growth. Headquartered in Switzerland and spun off from

in 2023, SEALSQ produces secure semiconductors with PQC algorithms for use in identity management, automotive, and IoT applications.

• Financial Performance: Preliminary unaudited revenue for the first nine months of 2025 reached $9.9 million, including $5.1 million in Q3. The company projects full-year revenue of $17.5–$20 million, representing 59%–82% annual growth.
• Liquidity: With $220 million in available funds, SEALSQ has ample resources for research, development, and expansion.
• Strategic Moves: The acquisition of IC'ALPS in August 2025 enhanced SEALSQ’s ASIC design capabilities, speeding up its product development timeline.

BTQ Technologies Inc. (NEO: BTQ): The Speculative Growth Prospect

Based in Vancouver, BTQ is developing blockchain infrastructure fortified with PQC methods. Although its Q1 2025 revenue was just C$0.25 million, its $1.3 billion market capitalization reflects high expectations for future demand in finance and large-scale web networks.

• Key Advantages: BTQ’s focus on wallets, digital signatures, and random-number generation aligns with NIST’s PQC guidelines.
• Risks: The company’s limited cash reserves (C$8 million) and lack of a clear revenue model mean it must continue to raise capital.

01 Communique (TSXV: ONE): The Early Niche Entrant

Rebranded as “01 Quantum,” 01 Communique has shifted from legacy remote-access products to PQC-based encryption under its IronCAP brand. With annual revenue of C$0.4 million and C$1.3 million in cash, it targets businesses looking to secure their data for the future.

• Market Position: As an early entrant in Canada’s PQC sector, 01 Quantum has opportunities for partnerships in identity and access management (IAM).
• Limitations: Its small scale and dependence on external funding restrict its growth potential.

Quantum eMotion Inc. (TSXV: QNC): The High-Stakes Contender

Quantum eMotion, a Canadian company working on quantum random-number-generator (QRNG) chips, holds $24 million in cash but has yet to generate revenue. Its technology is vital for secure key generation in quantum-resistant systems, especially in banking and defense sectors.

• Growth Potential: The company’s $480 million market cap reflects investor optimism for future expansion.
• Challenges: It must prove its commercial viability to support its valuation.

Investment Approach: Managing Risk and Opportunity

The quantum-safe cybersecurity industry is still emerging, with company valuations ranging from speculative to those with near-term revenue. A balanced investment strategy is crucial:

1. Core Investments: Focus on companies like SEALSQ that have significant cash reserves, predictable revenue, and strategic alliances.
2. Growth Opportunities: Invest in firms such as BTQ and 01 Quantum for exposure to fast-growing areas like blockchain and IAM, while being patient for commercial returns.
3. Speculative Positions: Consider Quantum eMotion for its foundational technology, but limit exposure due to its lack of revenue.

Conclusion: The Quantum Shift Has Arrived

The move toward quantum-resistant infrastructure is no longer theoretical—it is an urgent global necessity. Although Q-Day may still be a decade away, the “harvest now, decrypt later” tactic requires immediate attention. For investors, the priority is to identify companies that not only address the urgency of this transition but also possess the technical expertise to protect data in a post-quantum era.

SEALSQ, with its strong financial position and proven commercialization, stands out as the top near-term pick. Nevertheless, the sector’s long-term promise also depends on supporting early-stage innovators like

and 01 Quantum. By carefully weighing risk and reward, investors can take advantage of one of the most significant transformations in cybersecurity to date.