What is quantum computing and why does it matter for investors?

Quantum computing is a new technology that uses quantum mechanics principles to process information in fundamentally different ways than traditional computers. Instead of using bits (0s and 1s), quantum computers use qubits that can exist in multiple states simultaneously. This allows them to solve certain complex problems much faster than conventional computers. For investors, quantum computing represents a potential technological revolution with applications in drug discovery, financial modeling, artificial intelligence, and more. Companies developing this technology may see significant growth as quantum capabilities advance toward commercial viability.

What are qubits and why are different types mentioned in the stock descriptions?

Qubits (quantum bits) are the fundamental units of quantum information, similar to how bits function in traditional computing. Unlike regular bits that can only be 0 or 1, qubits can exist in multiple states at once. The different types mentioned (trapped-ion, superconducting, topological) refer to various physical approaches to creating and manipulating qubits. Each method has advantages and challenges. Superconducting qubits use tiny circuits cooled to extremely low temperatures, trapped-ion systems use charged atoms suspended in electromagnetic fields, and topological qubits use exotic quantum properties to more naturally resist errors. These different approaches represent competing technologies in the race to build practical quantum computers.

Why is quantum computing considered high-risk, high-reward for investors?

Quantum computing is considered high-risk because the technology is still developing, with significant technical challenges to overcome before reaching widespread commercial applications. Many pure-play quantum companies aren't yet profitable and face uncertain timelines to marketable products. The field also has competing technological approaches, and it's unclear which will ultimately succeed. However, the reward potential is substantial because quantum computing could revolutionize multiple trillion-dollar industries by solving previously impossible problems. If successful, early investors in the right companies could see outsized returns similar to those who invested in early semiconductor or internet companies.

What is "quantum supremacy" mentioned in Google's description?

Quantum supremacy (sometimes called quantum advantage) refers to the point when a quantum computer can perform a calculation that would be practically impossible for even the most powerful classical supercomputer to complete in a reasonable timeframe. In 2019, Google announced it had achieved this milestone with its Sycamore processor, which performed a specific calculation in minutes that would take traditional supercomputers thousands of years. While the calculation itself wasn't practically useful, it represented an important proof point showing that quantum computers can outperform classical ones for certain tasks. This milestone was significant for demonstrating the technology's potential, though practical, everyday applications still require further development.

Why does this group include semiconductor companies like Intel and NVIDIA?

While not making complete quantum computers themselves, semiconductor companies play crucial supporting roles in quantum computing. Companies like Intel are developing silicon-based quantum processors that could leverage existing manufacturing infrastructure, potentially making quantum computing more scalable. NVIDIA provides specialized software for quantum simulations on classical hardware, which is essential for algorithm development and testing before running on actual quantum systems. Other semiconductor equipment providers like Applied Materials and Lam Research supply the advanced fabrication tools needed to manufacture quantum chips. This ecosystem approach recognizes that quantum computing requires contributions from many technology layers, from manufacturing to software, creating investment opportunities beyond pure-play quantum companies.

15 handpicked stocks

Quantum-Utility Pipeline

Capture the future of computing with this carefully selected collection of quantum technology pioneers. These stocks represent companies building the foundational hardware and software that will power the quantum revolution, from specialized processors to the critical software that brings them to life.

Han Tan | Market Analyst

Updated 2 days ago | Published at juin 17