We all love underdog stories right? They are encouraging, entertaining, and just plain good for the heart and the soul as they remind us that anything in life is possible. Take the movie Rudy for example…

(Source: Giphy) 

While the guy never became an all-American for Notre Dame, or made it to the NFL, his small stature but big heart still inspired millions as he put a massive dent in the world of college sports. In fact, not only did he make TriStar Pictures a nice chunk of change with his story, but there’s no doubt his legend continues to reshape the nature of college football even to this day. 

However, underdog stories aren’t just for giving us the “feel” goods in the movie theaters; when it comes to the stock market, “underdog” stocks tend to become the most lucrative opportunities every degenerate trader with a few $100 bucks lays awake wet dreaming about. 

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Which is why as of this morning, there’s been an seismic expansion of two little known small cap companies in the AI space that most investors are completely overlooking. That’s right, no need to jump to reddit or lose brain cells searching for this gold nugget while glazing over terms like “HODL, YOLO, and MOASS”... cringe…

Instead it’s all right here for ya: 

(Source: Benzinga) 

Zapata Computing Holdings (NASDAQ:ZPTA) and D-Wave Quantum’s (NYSE:QBTS)  joint expansion are taking the AI craze to a whole new level. And just like my awkward high school prom date, they’re finally coming together to make some real magic happen.

So why is this breaking news? Well good question Joe…

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You see, while Zapata Computing Holdings Inc. and D-Wave Quantum Inc. have decided to expand their commercial partnership, this isn’t just a couple of small cap tech players shaking hands; this is like Batman and Iron Man teaming up. Two 'geniuses’ from two different worlds teaming up to accelerate the development of integrated quantum and generative AI solutions on D-Wave’s Leap cloud platform.

(Source: Yahoo Finance) 

Meaning this expanding partnership with Zapata’s Universal Generative AI software, and D-Wave’s real-time quantum cloud service, they are aiming to drastically improve their model training while molding the energy efficiency and optimization synergy between regular Generative AI and quantum computing. 

(Source: Giphy) 

I know, alot of big “tech” words there, so here’s why it matters for investors: AI is no doubt the buzzword that has every Wall Streeter licking their chops. It’s everywhere—on the news, in your coffee shop conversations, and even your grandma is asking about it. But here’s the big issue no one seems to be thinking about: AI can only go so far on its own. 

It’s like trying to run a marathon in flip-flops. Sure it’s making strides, but for it to really impact our world as we know it, it’s going to need some of Lance Armstrong's special juice: Enter quantum computing. 

(Source: Forbes) 

Quantum computing is the secret sauce that can supercharge AI, making it faster, more efficient, and way cooler.

Christopher Savoie, CEO of Zapata, put it like this: their partnership isn’t just about business value; it’s about providing the compute capacity that enterprises are desperately seeking as they dive deeper into generative AI applications. 

Christopher Savoie (Source: The Seattle Times)

In other words, they’re giving companies the fuel they need to keep the AI engine running.Now obviously, any company with a sniff of AI in their business plan could make these claims and empty promises (like my wife's “tonight” promises). But when it comes to Zapata, the hype is real.. 

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According to reports, Zapata has already presented key research findings to DARPA (yes, the same folks who brought us the internet). This research isn’t just academic fluff; it’s about real-world applications like designing catalysts for ammonia production, computational fluid dynamics for ship design, and simulating materials for superconductors and batteries. So it’s clear these aren’t just pie-in-the-sky ideas; they’re projects with the potential to be worth billions.

And let’s be real, if DARPA is paying attention, so should we. 

(Source: Technica Curiosa) 

But what’s the money saying bro? Good question: Zapata’s financial health is a bit of a mixed bag. With a market cap just over $20 million, they’re still a very tiny small fish in a big pond. Their revenue for the last twelve months was $5.39 million, with a gross profit margin of 19.69%. Not exactly Bitcoin-level returns, but here’s the twist: they’ve got more cash than debt, which is a good sign.

(Source: Giphy) 

The stock? Well it’s obvious it’s been in the sh&$ter. Seriously, the thing looks like it’s fallen off a cliff since it’s highs in March. 

(Source: Quantum Zeitgeist)

And while Wall Street isn’t screaming “buy now”, remember, this is tech, and with tech any catalyst or news revolving AI is bound to put a little pep in the step. 

Now only time will tell if that will be the case or not, but where the current price is, it seems to be more at the bottom than the top - meaning there’s a chance for way more room to run up then to run down. So for those with a taste for risk, this could be groundbreaking technology to keep a closer eye on in the days ahead. 

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Now when it comes to D-Wave, they are looking a bit more stable in terms of price action. With the stock price hovering around $1.24, the stock has corrected back to demand levels that have got bulls stepping back into the game based on the breaking news. So in the short-term, D-Waves price action looks a bit more promising than Zapata’s… for now anyway. 

(Source: Yahoo Finance) 

But regardless of what the charts say at this moment in time, the real opportunity is the technology that these companies possess to potentially revolutionize industries. Quantum computing isn’t just about making AI faster; it’s about making it better and far more powerful than it already is. This is the very reason why D-Wave’s CEO, Dr. Alan Baratz, is excited about bringing the combined power of Universal Generative AI and quantum computing to their customers. And who can blame him? 

(Source: Giphy)

This tech combo could redefine everything from logistics and drug discovery to financial modeling and cybersecurity. So there’s definitely quite a bit of corners of the industry to dominate in. 

Which is why investors should definitely keep an eye on Zapata and D-Wave throughout this expansion. Because as they dive deeper into this partnership, they’re not just advancing technology; they’re setting the stage for the next big leap in AI and quantum computing. 

(Source: Giphy) 

Now again, before you start calculating the numbers in your portfolio, keep in mind that while these two companies are listed on the NYSE and Nasdaq, they are still small caps. And we all know small caps can and could “cap” yo a$$ harder than Phil Collins on the Tarzan soundtrack. So please act accordingly. 

In the end, Zapata and D-Wave’s expansion partnership is definitely promising when it comes to each of the company's future outlook. And while they may be underdogs now, they could end up being the market’s next AI superstars. But as always, only time will tell. 

Stocks.News doesn't hold any positions in companies mentioned.