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What happened: Quantum Computing (QUBT) stock was up 12% on Tuesday.

What’s behind the move: The application software developer reported revenue of $3.7 million for the first three months of the year, a substantial increase from $39,000 the same period a year ago, and a beat compared to $3.1 million expected by Wall Street.

The year-over-year increase in revenue was driven primarily by the acquisition of Luminar Semiconductor in early February and, to a lesser extent, by the purchase of NuCrypt in early March, one of the first companies to commercialize quantum communications technology.

Shares of peer D-Wave Quantum (QBTS) were volatile during Tuesday’s session after the company posted quarterly revenue that missed expectations, but bookings, or future commitments soared.

What else you need to know: Quantum stocks have been on a tear since around the time of World Quantum Day in mid-April, when Nvidia (NVDA) unveiled its new “Ising” open-source quantum AI models.

The sector has been in recovery mode following a volatile start to the year, driven in part by surging revenue from partnerships with government and defense agencies, which are becoming major customers.

IonQ (IONQ) posted the strongest quarter among its peers earlier this month, with revenue jumping sharply, helped by acquisitions and enterprise demand. The company also raised full-year revenue guidance.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.

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