Wall Street Lunch: IBM Advances Quantum Roadmap By Connecting Two Cryogenic Modules

IBM (IBM) achieved a milestone by linking and cooling two cryogenic modules, advancing toward a fault-tolerant quantum computer. Target (TGT) delivered strong Q2 results, exceeding expectations on EPS and sales growth despite price cuts on key items. The Treasury will double buyback operations for long-dated securities, easing yields and supporting liquidity in the bond market. Amazon (AMZN) plans to expand its drone delivery service to suburban areas in nearly 500 U.S. cities, potentially bringing smaller, lightweight packages to millions more customers by the end of this year.

IBM says it has successfully joined and cooled down two cryogenic modules into a single environment, an important milestone on its path to creating the world's first fault-tolerant quantum computer. The modules are more than 8 feet tall and 8 feet wide and can be cooled down to 4 Kelvin (the temperature of liquid helium) in less than five days, before ultimately reaching a final temperature of below 15 millikelvin. The new design also allows modules to connect and directly link to quantum processors in an "L-coupler" technology. By next year, IBM's roadmap for quantum plans to use L-couplers to link multiple processors into a larger quantum computer with at least 1,000 programmable qubits. Jay Gambetta, director of IBM Research, said this achievement “will accelerate our progress alongside continued innovation in quantum hardware, software, and algorithms."

Among active stocks, Target (TGT) outperformed in Q2, delivering broad-based sales growth and improved profitability despite the impact of price cuts on more than 10,000 frequently purchased items. Target's EPS was boosted by tariff refunds to the tune of $1.65, but even excluding that, EPS of $4.11 and sales growth of 5.3% still topped expectations. Lowe's Companies (LOW) is down after lowering its full-year sales outlook amid pressure in the home improvement sector. Lowe's said it expects total sales of approximately $92B for the full year, compared with $92.9B consensus. Comparable sales are expected to be flat to up 2% from a year ago. And Estée Lauder (EL) is rallying after the beauty products maker reported fiscal Q4 results that beat estimates and raised its adjusted operating-margin outlook for fiscal 2027.

In today’s trading, yields are falling after the Treasury Department announced it will at least double the maximum size of its liquidity-support buyback operations for longer-dated nominal coupon securities. Essentially, the government is willing to buy up to twice as much of the old, hard-to-trade long-dated debt to keep the market from seizing up. Some are calling it "QE Lite." Operations covering the 10- to 20-year and 20- to 30-year sectors will rise from a $2B ceiling to at least $4B each, effective Sept. 9 through the remainder of the current refunding quarter, which ends Nov. 4. The move comes as the U.S. 30-year Treasury yield (US30Y) recently touched levels not seen since 2007, climbing above 5.3% earlier this week. Following the announcement, the 30-year fell to around 5.19% and the 10-year Treasury yield (US10Y) dropped to 4.65%.

And in other news of note, Amazon (AMZN) plans to expand its drone delivery service to suburban areas in nearly 500 U.S. cities, potentially bringing smaller, lightweight packages to millions more customers by the end of this year. The service plans to launch soon in the Chicago, Syracuse, Cleveland, Atlanta and Boise metro areas, with additional communities expected later this year. The expansion is expected to intensify competition between Amazon and Walmart (WMT) to offer consumers faste...