Quantum Stocks Surge While Palantir Slips on Security Concerns

Sometimes the market feels like a physics experiment gone wrong...

Friday was one of those days. Quantum stocks went into hyperdrive, while Palantir suffered its steepest drop since August. The Dow managed to squeeze out a 0.5% gain, but the Nasdaq slipped 0.3%, as tech names wobbled under pressure.

Shutdown Clouds Over Wall Street

The ongoing government shutdown continues to cast a long shadow. Because of it, investors didn’t get the September jobs report, leaving everyone guessing about the true state of the labor market.

For now, optimism about possible rate cuts keeps the bulls from running for cover, though the longer this drags on, the harder that optimism will be to sustain.

In Washington, gridlock remains the order of the day. Democrats once again blocked a temporary GOP funding proposal, and President Trump retaliated by freezing financing for a Chicago transit project.

Meanwhile, the ADP report earlier this week showed 32,000 jobs lost in September, and August’s figures were revised lower. That’s not exactly the data backdrop the Fed was hoping for.

Analysts at Payden & Rygel are convinced that Jerome Powell’s team will have little choice but to cut rates in October, shutdown or not. Bank of America warned, however, that a weakening labor market has historically marked the end of bull markets, in 2000 and 2007, to be exact.

Déjà vu, anyone?

Palantir Hit by Security Concerns

Palantir (PLTR | -7.47%) took a beating after Reuters reported that a U.S. Army memo flagged “fundamental security problems” in its NGC2 communication system.

The note reportedly stated that “we have no control over who sees what,” not exactly the kind of phrase you want to see when you’re selling military-grade software.

The company quickly denied the allegations, but investors weren’t having it. The stock saw its sharpest drop in nearly two months. Palantir’s close ties with President Trump have often been seen as a strength, but in this case, not even that connection offered much protection.

Quantum Stocks Defy Gravity

While the big names were under pressure, the quantum computing niche turned into a fireworks show.

Rigetti Computing (RGTI | +13,16%) hit a fresh record at $40 per share, a staggering 3,450% above where it traded a year ago. Trading volume even topped that of Alphabet and Microsoft.

The trigger? Ascendiant Capital Markets hiked its price target for Quantum Computing (QUBT | +23.22%) from $22 to $40.

Never mind that the company’s quarterly revenue was a modest $61,000, it now boasts a market cap of $4.6 billion. Analyst Edward Woo, who’s been bullish since 2021 (when the stock was at $11), still sees upside. One can only imagine what Einstein would think about this kind of “quantum leap.”

Established players like IBM (IBM | +0.58%) and Nvidia (NVDA | -0.67%) are also active in quantum research, though they remain the safer (and saner) bets for most investors — at least those who prefer fundamentals over fairy dust.

Other Company Highlights

Applied Materials (AMAT | -2.71%) warned that new U.S. export restrictions will knock $110 million off its Q4 revenue and as much as $600 million in 2026.

Apple (AAPL | +0.35%) edged higher despite Jefferies downgrading the stock to Underperform, calling iPhone 17 demand “overrated” after a recent price cut.

Plug Power (PLUG | +34,63%) exploded higher after HC Wainwright doubled its price target to $7. The hydrogen stock gained 60% for the week, its best run in years.

3M (MMM | -0.09%) is exploring a sale of several industrial assets that have shown limited growth potential, according to Bloomberg sources.

Macro Check: Growth Slows, Commodities Mixed

Economic data offered little cheer.

• The ISM Services PMI came in at exactly 50.0, the razor’s edge between expansion and contraction, for the first time in 15 years. S&P Global’s data echoed that slowdown.

• The euro gained slightly to 1.1742, while gold rose above $3,900 an ounce as investors sought safety.

• Oil prices fell sharply ahead of Sunday’s OPEC+ meeting.

• Bitcoin hovered near $122,800, showing that even amid economic uncertainty, some traders still prefer digital gold to the physical stuff.

My Take

Friday’s session was a perfect microcosm of the current market: enthusiasm and fear fighting for dominance. Quantum stocks are proof that speculation is alive and well, while Palantir’s nosedive shows how quickly sentiment can flip when trust erodes.

Until the government reopens and we get a clear jobs picture, the market will likely remain a mix of quantum euphoria and macro anxiety.

Personally, I’m keeping one foot on the gas and the other firmly on the brake, just in case gravity kicks back in.

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Kristoff - ChartMill

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