Telefónica’s Quantum Computing Move With CESGA Could Be A Game Changer For Telefónica (BME:TEF)

• In December 2025, IQM Quantum Computers announced a purchase agreement with Telefónica and the Galician Supercomputing Center (CESGA) to install Spain’s first IQM full-stack quantum systems, a 54-qubit Radiance for high-performance computing and a 5-qubit Spark for education, scheduled for delivery by June 2026.
• This project places Telefónica at the heart of integrating quantum computing with artificial intelligence and high-performance computing in Europe’s research infrastructure, expanding access for scientists and leading companies across multiple sectors.
• We’ll now examine how Telefónica’s role in deploying quantum systems into CESGA’s supercomputing hub could influence its investment narrative and technology positioning.

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Telefónica Investment Narrative Recap

To own Telefónica, you need to believe its core connectivity and growing digital services can justify today’s valuation despite high leverage and recent losses. The CESGA quantum project supports its technology narrative but looks immaterial for near term financial catalysts or for addressing the company’s biggest current risk, which is its elevated debt burden and the pressure this puts on flexibility, interest coverage and the sustainability of its generous dividend policy.

Among recent announcements, Telefónica’s reaffirmation of 2025 earnings guidance and its €0.30 per share cash dividend for 2025 stand out as more immediately relevant for investors than the CESGA quantum agreement. Together with portfolio simplification and ongoing cost efficiencies, these commitments frame how investors might weigh emerging technology projects like quantum computing against the company’s need to improve profitability and protect cash flow.

But while Telefónica leans into cutting edge projects, investors should be aware of the continuing risk that its high leverage could...

Read the full narrative on Telefónica (it's free!)

Telefónica's narrative projects €38.3 billion revenue and €2.2 billion earnings by 2028.

Uncover how Telefónica's forecasts yield a €4.51 fair value, a 30% upside to its current price.

Exploring Other Perspectives

Five fair value estimates from the Simply Wall St Community span about €4.51 to €9.24 per share, reflecting very different expectations. You can weigh those views against Telefónica’s high leverage risk and consider how that may shape the company’s room to invest and improve returns over time.

Explore 5 other fair value estimates on Telefónica - why the stock might be worth over 2x more than the current price!

Build Your Own Telefónica Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Telefónica research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
• Our free Telefónica research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Telefónica's overall financial health at a glance.

Want Some Alternatives?

Early movers are already taking notice. See the stocks they're targeting before they've flown the coop:

• Explore 29 top quantum computing companies leading the revolution in next-gen technology and shaping the future with breakthroughs in quantum algorithms, superconducting qubits, and cutting-edge research.
• AI is about to change healthcare. These 29 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• The latest GPUs need a type of rare earth metal called Terbium and there are only 38 companies in the world exploring or producing it. Find the list for free.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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