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Why Dow Chemical Is Collaborating with 1QB

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Dow Chemical and 1QB in collaboration

On June 21, 2017, Dow Chemical (DOW) announced that it would collaborate with 1QB Information Technologies to develop quantum computing tools for the chemicals and materials science technology spaces. It’s a multiyear agreement. However, the financial details of the collaboration weren’t disclosed. The collaboration is expected to help DOW accelerate its product and process development.

A.N. Sreeram, senior vice president of R&D and chief technology officer of DOW, said, “Together with 1QBit, we have achieved ‘proof of concept’ for the application of quantum computing in areas relevant to Dow. With this new, multi-year agreement, we intend to develop a robust capability in the quantum computing space, further advancing our world-class innovation capabilities and maximizing shareholder return.”

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DOW’s stock performance for the week ended June 23, 2017

DOW fell 1.4% for the week ended June 23, 2017. The drop closed the gap between the current price and the 100-day moving average price. However, DOW still traded 1.5% above the 100-day moving average price of $62.51. On a year-to-date basis, the stock has returned 11.7%. Analysts estimate DOW’s 12-month target to be at $72.11, implying a potential return of 13.6% from the June 23 closing price. DOW’s relative strength index of 50 indicates that the stock is neither overbought nor oversold.

Investors can indirectly hold DOW by investing in the Materials Select Sector SPDR Fund (XLB), which invests 12.2% of its portfolio in DOW. The top holdings of the fund include DuPont (DD), Monsanto (MON), and Praxair (PX) with weights of 12.0%, 8.7%, and 6.5%, respectively, as of June 23, 2017.

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