Quantum Computing Stocks Are All The Rage On Wall Street

As seen from this ETF focused on Quantum Computing stocks, the sector is hot on Wall Street. So, what is quantum computing?

The field of quantum computing contains a range of disciplines, including quantum hardware and quantum algorithms. While still in development, quantum technology will soon be able to solve complex problems that supercomputers can’t solve, or can’t solve fast enough.

By taking advantage of quantum physics, fully realized quantum computers would be able to process massively complicated problems at orders of magnitude faster than modern machines. For a quantum computer, challenges that might take a classical computer thousands of years to complete might be reduced to a matter of minutes.

The study of subatomic particles, also known as quantum mechanics, reveals unique and fundamental natural principles. Quantum computers harness these fundamental phenomena to compute probabilistically and quantum mechanically.

Investopedia, 5 August 2024

It sounds amazing which explains the excitement. Below is a list of the largest holdings in QTUM.

It is a lively portfolio. One that appeals to me is IonQ.

Let IonQ tell us what they do.

Founded on more than 25 years of pioneering academic research, IonQ is developing trapped-ion quantum computers, bringing this powerful technology out of the lab and into commercial, industrial, and academic applications. Ionized atoms are the heart of our quantum systems, and as a result, we believe our computers can perform longer, more sophisticated calculations with fewer errors than any quantum computer yet built.

Poised to be the first mover and a leading player in the quantum revolution, IonQ is deeply committed to expanding quantum access to more people in more places. We lead the market with the first and only quantum hardware integrated with all major cloud platforms, quantum programming languages, and quantum software developer kits, empowering people from all walks of life to solve real-world problems and optimization challenges across chemistry, medicine, finance, logistics, and much more.

With a business model aligned to rapid quantum market growth, an unparalleled technological advantage, and a deep history of quantum innovation and leadership, we believe we are well-positioned to lead the way forward as quantum computing changes the world.

IonQ website

If the company is successful with its ambitious plans it could become extremely valuable. It is at the forefront.

On October 1st, 2021, IonQ began trading as IONQ on the New York Stock Exchange, making it the world’s first public pure-play quantum computing company. We remain hard at work realizing the world-changing potential of quantum computing.

IonQ website

The timing of the IPO was unpropitious just ahead of a collapse in share prices. The shares briefly rocketed and then plummeted to around $3 taking the valuation below $1bn. In bear markets, investor horizons shorten and are more influenced by present losses than promises of a golden future.

As noted in a recent alert newsflow is a powerful determinant of share prices. Exciting companies generate exciting newsflow and IonQ is no exception. Don’t ask me exactly what they are up to but plenty is happening.

IonQ has doubled sales in each of the three years since flotation but the numbers are still modest. It is what may be coming that is driving the share price.

In the quantum world, there are two camps or schools of thought on this topic. One camp believes, you need near perfection before value can be unlocked. If they are correct, sadly, Quantum is still a long way off. The naysayers belong to this camp, but their numbers are dwindling every day.

The other camp, which IonQ and others belong to, believe today’s early noisy quantum computers can provide value even before they are perfected. If we are right, it gives us a significant advantage by generating early meaningful cash collection as we work towards perfection.

About 18-months ago, I challenged our teams to answer a critical question. I told them, I don’t care about theoretical algorithms with limited practical applicability. I don’t care about the academic argument about quantum supremacy. Instead, I asked them what are the applications that have the potential to disrupt multibillion dollar industries.

The team has since identified several application areas, where we believe commercial value will be first realized and aligned with our next-generation hardware and IonQ’s production capability. We then reached out to industry partners to understand the value of these applications to their respective industries.

Peter Chapman, CEO, IonQ, Q3 2024, 6 November 2024

It is making progress.

Today marks a seminal moment in the quantum industry, as we announce the first two application areas, biopharmaceutical drug discovery and computer-aided simulations for the engineering and manufacturing industries. In the global biopharmaceutical industry, I am excited to announce the creation of a new quantum application development centre in collaboration with AstraZeneca. IonQ will be leveraging the power of our quantum experts and AstraZeneca’s world-class scientists to develop applications in their innovation bio venture hub in Gothenburg, Sweden.

In the computer-aided engineering industry, IonQ has joined forces with Ansys to accelerate simulation, expand high fidelity design exploration and reduce product development timelines, enabling faster market entry for more innovative products. The partnership is aimed at making simulation accessible to both quantum experts and non-experts by allowing seamless integration between Ansys software and IonQ computers.

To reach our aggressive sales goals, we have always planned on growing application revenue. We expect these applications to drive demand for new systems in production, but also for us to share in the up to $2 trillion economic value that McKinsey projects will be unlocked by 2035. We’ve reached an incredibly impactful point and we could not be more excited to partner with AstraZeneca and Ansys to bring production grade quantum applications to their respective industries. I can’t tell you how much personally, I am excited about these applications.

Peter Chapman, CEO, IonQ, Q3 2024, 6 November 2024

Quantum Networking is another important area of focus.

Now, switching our focus to quantum networking. We believe that IonQ is the only quantum computing company that has an inherent advantage in the quantum networking market contributing to our early leadership. Specifically, we have always relied upon networking, as part of our architecture to scale our quantum computers. Quantum networking and quantum computing for IonQ are highly synergistic.

Our recent wins of a $54.5m contract with AFRL [Air Force Research Laboeratory] and our $5.7m contract with the Applied Research Laboratory for Intelligence and Security or ARLIS are examples of our quantum networking investments paying off. At more than $60m, we believe these two sales alone have catapulted IonQ to become a leading player in the quantum networking industry.

Peter Chapman, CEO, IonQ, Q3 2024, 6 November 2024

Plenty of excitement.

We believe that, we are now the leading company at the intersection of quantum computing and networking. And in the future, we will likely also be known as as a software application company. Our commercial track record has launched IonQ towards the rarefied echelon of rapidly growing young technology companies, by achieving nine figures in bookings in record time.

Peter Chapman, CEO, IonQ, Q3 2024, 6 November 2024

Below is a recent report on the potential for quantum computing integrated with AI.

Advancements in quantum hardware and algorithms are making quantum computing increasingly practical. New developments in quantum processors are improving their performance and stability, allowing for more complex calculations. Enhanced quantum algorithms are being designed to solve specific problems more efficiently. These improvements are crucial for integrating quantum computing with AI, as they enable more sophisticated data processing and analysis. As quantum systems become more accessible, their potential applications in AI grow. This integration is expected to lead to breakthroughs in areas such as optimization and predictive modeling. The ongoing progress in both fields is paving the way for innovative solutions and applications. A report from Grand View Research projected that the global quantum AI market was valued at USD 256.0m in 2023 and is projected to grow at a CAGR of 34.4pc from 2024 to 2030. The report said: “The market is growing rapidly, driven by advancements in quantum computing and its potential to solve problems that classical computers struggle with. Quantum computing enhances machine learning algorithms, enabling them to process vast datasets and uncover patterns that were previously unreachable. The combination of AI and quantum technologies is set to transform industries such as finance, healthcare, logistics, and manufacturing by enabling more precise predictions, optimizations, and real-time decision-making capabilities.”

FN Media Group, 18 December 2024

Share Recommendations (18 December 2024)

Defiance Quantum ETF. QTUM

IonQ. IONQ

Alphabet. GOOGL

More On IonQ for the scientists among us.

IonQ IONQ, a leader in the quantum computing and networking industry, recently announced the display of its ion trap—the foundational technology behind its quantum computers—in the lobby of the New York Stock Exchange (NYSE). This showcase recognises IonQ’s position as a technological pioneer, quantum leader, and the only quantum computing company highlighted at the world’s largest stock exchange.

IonQ’s ion trap, the brain of the company’s advanced quantum computers, uses precisely positioned ions as the foundational building blocks of its quantum approaches. These ions are trapped in a vacuum using electric fields and enable high-fidelity quantum operations. Trapped ion technology is a key advantage in progressing IonQ’s mission to build the world’s best quantum computers to tackle the most complex problems.

Reuters, 18 December 2024

Strategy – Take An Initial Position In Quantum Computing Technology

Exciting things are happening in quantum computing but it is still early days. I would suggest it is a good time to gain early exposure to a potentially exciting sector.

Alphabet Also Has A Finger In The Quantum Computing Pie

It seems that Alphabet (GOOGL) also has a stake in quantum computing with its Willow project.

Today I’m delighted to announce Willow, our latest quantum chip. Willow has state-of-the-art performance across a number of metrics, enabling two major achievements.

The first is that Willow can reduce errors exponentially as we scale up using more qubits. This cracks a key challenge in quantum error correction that the field has pursued for almost 30 years. Second, Willow performed a standard benchmark computation in under five minutes that would take one of today’s fastest supercomputers 10 septillion (that is, 10²⁵) years — a number that vastly exceeds the age of the Universe.

The Willow chip is a major step on a journey that began over 10 years ago. When I founded Google Quantum AI in 2012, the vision was to build a useful, large-scale quantum computer that could harness quantum mechanics — the “operating system” of nature to the extent we know it today — to benefit society by advancing scientific discovery, developing helpful applications, and tackling some of society’s greatest challenges. As part of Google Research, our team has charted a long-term roadmap, and Willow moves us significantly along that path towards commercially relevant applications.

Hartman Neven, founder and lead, Google Quantum AI, 9 December 2024

I listened to a video about Willow from a director of Google Quantum AI. I hardly understood a word but it sounds incredible. The research taking place in America generally and within the megacaps particularly is mind-blowing.

There is also scope for M&A activity down the line.