Quantum computing is transitioning from pure research into real-world business applications, creating potential opportunities for investors. In this 3,500 word guide, we‘ll survey the quantum computing investment landscape, analyze top public stocks, highlight leading startups, discuss quantum ETFs, and evaluate the outlook for quantum stocks in 2024 and beyond.
The Promise and Potential of Quantum Computing
Before diving into quantum investment options, let‘s briefly review what makes this emerging technology so revolutionary.
While classical computers process information in binary bits with values of 0 or 1, quantum computers utilize quantum bits (qubits) that can exist in a superposition of 0 and 1 at the same time. This allows quantum systems to perform calculations exponentially faster by processing multiple states in parallel.
Experts anticipate quantum computing reaching the tipping point of "quantum advantage" at between 50 to 100 logical qubits. This is the point where quantum computers outperform the world‘s best supercomputers. We‘re not there yet, but progress is accelerating.
Leading quantum computers today have reached 70+ physical qubits. Logic qubits using error correction techniques are fewer but increasing rapidly.
Quantum Volume measures computational power. Image Source: IBM
With continued exponential advances, quantum computers will unlock revolutionary capabilities in material simulation, optimization, machine learning, cryptography, financial modeling, and pharmaceutical research.
McKinsey estimates the potential market impact at $850 billion to $2.2 trillion per year by 2040. While forecasts vary, quantum computing could reach over $3 billion by 2030 according to Grand View Research.
For investors, this presents an enormous opportunity to contribute to and benefit from the quantum revolution. Now let‘s survey the landscape of quantum stocks, startups, ETFs, and more.
Publicly Traded Quantum Computing Stocks
Most quantum computing companies are still private startups. But many public corporations are making major investments to stake their claim in the quantum future.
Tech Giants Exploring Quantum
The world‘s largest tech companies are all involved in quantum research and development to varying degrees:
IBM (NYSE:IBM) pioneered quantum computing research and still leads with its 127-qubit Eagle processor. They offer cloud quantum services and partners with Fortune 500 companies on quantum applications. With 170+ patents, IBM aims to commercialize quantum via cloud services.
Alphabet (NASDAQ:GOOG) operates a 72-qubit quantum computer called Sycamore. Their Google AI Quantum team conducts research into quantum machine learning and algorithms. Google offers some public access to its quantum processors via the cloud.
Microsoft (NASDAQ:MSFT) offers quantum computing development kits through Azure. They have ambitious plans to build a topological quantum computer. Microsoft invests directly in startups like PsiQuantum and others developing quantum software and tools.
Amazon (NASDAQ:AMZN) provides access to quantum computers from D-Wave, Rigetti, and IonQ via Amazon Braket. AWS has a quantum solutions lab helping enterprise customers experiment. Their cloud-based approach aims for quantum advantage.
Intel (NASDAQ:INTC) is focused on silicon spin qubit and superconducting qubit research. Intel aims to produce commercial-grade quantum systems and provides foundational quantum control chips.
These big tech stocks provide retail investors indirect exposure to quantum progress without as much risk. While their quantum involvement is still limited, it could become more material over time.
Direct Quantum Exposure Stocks
Some public companies focus directly on quantum computing, providing higher risk/reward:
IBM (NYSE:IBM) leads in quantum research and IP with 170+ patents. They offer cloud access to quantum systems up to 127 qubits through Q Network.
Rigetti Computing (NASDAQ:RGTI) develops superconducting quantum processors and offers Platform as a Service. They went public in 2024 after a SPAC merger.
IonQ (NYSE:IONQ) uses trapped ions for modular quantum computers up to 32 qubits. They plan to launch a 256 qubit system in 2024 on the way toward commercialization.
Quantum Computing Inc. (NASDAQ:QUBT) focuses on quantum software, algorithms, and cybersecurity applications. They aim to run quantum applications on classical computers before quantum hardware scales up.
Archer (NASDAQ:ARRXF) develops materials, processors, and algorithms for quantum and biotech applications. They are researching systems with 100+ qubits.
These "pureplay" quantum stocks offer direct exposure but have higher volatility as early-stage ventures. Most have market caps under $500 million presently.
Enabling Technology Companies
Some public companies provide the foundational technologies required to build quantum computers:
Nvidia (NASDAQ:NVDA) offers quantum machine learning platforms and develops GPUs for accelerated quantum computing. Nvidia powers quantum research at labs like Oak Ridge National Laboratory.
Applied Materials (NASDAQ:AMAT) provides semiconductor manufacturing equipment critical for production of silicon-based qubits and electronics.
TE Connectivity (NYSE:TEL) supplies high-performance connectors and components needed in quantum control systems and cryogenic environments.
Keysight Technologies (NYSE:KEYS) offers test and measurement hardware/software used by quantum researchers to design, prototype, and validate quantum technology.
While not exclusively quantum focused, these stocks supply key infrastructure to support the growth of quantum computing.
Quantum Computing ETFs
A few broad ETFs provide exposure to the public quantum stocks:
Defiance Next Gen Computing ETF (NYSE:QUBT) – Holds IBM, Google, Intel, Nvidia and other stocks with quantum activities.
Invesco NASDAQ Future Gen 200 ETF (NASDAQ:QQQS) – Contains quantum stocks like Nvidia, IBM, Intel at about 2% weighting each.
First Trust Nasdaq Artificial Intelligence and Robotics ETF (NASDAQ:ROBT) – Invests in names like Nvidia, Intel, IBM involved in quantum research.
These ETFs offer diversified exposure to the quantum ecosystem. But their holdings have limited quantum focus presently.
Notable Private Quantum Computing Companies
For accredited investors willing to take on more risk, private quantum startups are leading the charge toward commercialization:
Startup Quantum Hardware Companies
PsiQuantum has raised over $500 million to build quantum computers using silicon photonics. Backed by BlackRock, Microsoft and others. Aiming for 1 million+ qubit system.
D-Wave pioneered quantum annealing systems and has sold computers to LANL, Google, and NTT. Raised $200+ million. Working toward 5,000+ qubit system.
Rigetti Computing develops superconducting quantum processors and offers Platform as a Service. Raised $200+ million before going public in 2024.
IonQ uses trapped ions for modular quantum computers up to 32 qubits. Raised $175+ million before going public in 2021. Planning 256 qubit system.
Xanadu uses photons to build optical quantum computers. Raised $40+ million. Recently demonstrated fault tolerance with error correction.
QC Ware focuses on enterprise quantum software applications for finance, batteries, logistics delivered via cloud services. Raised $22+ million.
Q-Ctrl develops software for greater quantum computer accuracy and error correction. Raised $15+ million.
Quantum Machines builds control electronics and software for managing quantum systems. Raised $17+ million.
Startup Quantum Software Companies
1Qbit develops quantum algorithms and applications for the finance, energy, life sciences, and manufacturing industries. Raised $45+ million.
Zapata Computing concentrates on quantum algorithms, applications, and software tools. Raised $67+ million. Recently launched Orquestra platform.
Classiq provides a toolkit for developing quantum algorithms and migrating them across quantum systems. Raised $33 million.
ProteinQure applies quantum computing to computational drug design. Raised $10+ million.
Menten AI focuses on advancing protein simulations through quantum machine learning. Raised $9+ million.
Investing in these private players offers exposure to innovative startups racing to make quantum real.
Outlook for Quantum Stocks in 2024
After reviewing the public stocks, startups, and ETFs in the quantum computing arena, should investors buy into quantum stocks today? There are several positive indicators:
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Exponential growth in quantum computing power continues, with key milestones like commercialization potentially 3-5 years away.
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Universities are producing more quantum PhDs to meet growing talent demand.
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Government initiatives like the US National Quantum Initiative Act are accelerating R&D. Total expected US investment exceeds $25 billion.
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Applications in areas like AI, materials, logistics, and finance are being proven out, showing real-world value.
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Venture funding flowing into quantum startups hit record levels in 2021, crossing $1.8 billion according to Crunchbase.
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Mergers and acquisitions have begun, with transactions like Honeywell acquiring Quantinuum showing a maturing industry.
On the other hand, commercial viability remains unproven and unclear leaders have emerged yet. While appropriate for some higher risk investors, average investors may want to remain on the sidelines until there are stronger signals of useful quantum advantage.
The quantum computing ecosystem today resembles the state of the traditional semiconductor industry in the 1950s and 60s. Many roads are being pursued and it‘s unclear which approaches will win out. But what does seem clear is that quantum will have a transformative effect on computing overall.
History Often Rhymes
Emerging technologies frequently follow a common life cycle pattern:
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Research Phase – Breakthrough science unlocks new capabilities as researchers aim to prove theoretical viability. Many disparate approaches explored.
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Prototype Phase – R&D teams demonstrate initial working models yet practical uses remain unclear. Hype outpaces reality.
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Struggle Phase – Despite promise, commercialization challenges emerge. Work continues in fits and starts. Many companies pivot or shut down.
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Growth Phase – A use case and viable product finally gain traction. Leaders emerge and investment grows. Disruption begins.
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Maturity Phase – Mainstream adoption drives rapid growth. Market stabilizes around established players and applications.
This cycle played out in technologies like personal computers, the internet, mobile phones, and more. Quantum computing seems to be approaching the end of stage 2 as we await the first real quantum killer app to drive mass adoption.
For believers in the quantum future, now presents an attractive window to invest ahead of the growth curve before valuation soar. And for all investors, keeping an eye on quantum progress will be key, as it may disrupt every information-based sector.
Conclusion
Quantum computing is still an emerging technology, but its disruptive potential is far-reaching. While commercial viability remains unproven, progress continues accelerating. For suitable investors, the companies driving quantum advances represent attractive opportunities today.
In this guide, we surveyed the landscape of public stocks, private startups, and quantum ETFs to watch in 2024. While risks are high with any new technology, quantum computing offers a chance for prescient investors to realize outsized returns over the long term. As quantum progresses on the path toward practical applications, its impact on computing power, AI, healthcare, finance, and more will be profound.