While artificial intelligence is the dominant tech trend of today, quantum computing is poised to emerge as the next potential paradigm shift. Quantum computers operate in a fundamentally different manner from classical computers, enabling them to solve certain types of incredibly complex problems that are intractable for even the most powerful supercomputers.
While it’s still in its very early stages, quantum computing represents a deep-future investment theme with world-changing potential.
What Makes Quantum Computing Different?
Classical computers store information as “bits,” which can be either a 0 or a 1. Quantum computers use “qubits,” which can exist as a 0, a 1, or both at the same time (a state called superposition). This, along with another quantum phenomenon known as entanglement, enables them to explore a vast number of possibilities simultaneously. This makes them incredibly powerful for specific tasks, such as materials science, drug discovery, and breaking modern encryption.
The Major Players in the Quantum Race
The race to build a useful, large-scale quantum computer is being led by some of the biggest names in technology and industry. Tech giants such as Google (GOOGL), Microsoft (MSFT), and IBM (IBM) all have significant quantum research divisions. There are also a handful of smaller, pure-play quantum computing startups, some of which have gone public, like IonQ (IONQ) and Rigetti Computing (RGTI). These companies are pursuing various technological approaches to building quantum bits, also known as qubits.
The Timeline is Long and Uncertain
Investors must understand that we are in the absolute earliest days of quantum computing. The current machines are small, fragile, and prone to errors. It will likely be many years, perhaps even a decade or more, before we have a quantum computer that can solve a commercially relevant problem better than a classical computer. This is not an investment for those looking for a quick return.
Potential Applications and Industries to be Disrupted
If and when quantum computing matures, its impact will be enormous. In medicine, it could be used to simulate molecules to design new drugs and therapies. In finance, it could be used to run incredibly complex risk models. In manufacturing, it could aid in designing new materials with exceptional properties. On the other hand, it also poses a major threat, as a powerful quantum computer could break the encryption that secures all of our digital data today.
A Highly Speculative Investment
Investing in quantum computing today is the definition of speculative. Pure-play stocks are extremely volatile and essentially represent bets on a specific technology that may or may not pan out. For most investors, the more prudent approach is to gain exposure through the large, diversified tech giants like Google and IBM. For them, quantum computing is a long-term research project, not the sole driver of their business.
Conclusion
Quantum computing is not science fiction, but it is still a technology of the future. The potential rewards are astronomical, but the risks and uncertainties are equally immense. For investors with a very long time horizon and a high tolerance for risk, it represents a chance to get in on the ground floor of what could be the next great technological revolution.
