Quantum computing stocks rallied sharply last week after the U.S. government announced $2 billion in grants to nine quantum computing companies in exchange for minority equity stakes.
International Business Machines (NYSE: IBM) is set to receive $1 billion in funding, with its shares jumping more than 12% following the announcement.
IBM also announced plans to build Anderson, described as America’s first purpose-built quantum foundry, cementing its position as an early leader in the space.
GlobalFoundries (NASDAQ: GFS), which will receive $375 million in funding, surged 15% and is also launching a new quantum-focused business unit.
Smaller publicly traded quantum companies D-Wave Quantum (QBTS) and Rigetti Computing (RGTI), each expected to receive about $100 million, rose 30% or more on the news.
The funding will come through the CHIPS and Science Act, underscoring the priority governments around the world are placing on this potentially transformative technology.
Last month, quantum stocks also surged after NVIDIA (NASDAQ: NVDA) released open-source AI models designed to support quantum computing research.
“AI is essential to making quantum computing practical,” NVDA CEO Jensen Huang said following the release.
According to McKinsey, quantum computing could create up to $2.7 trillion in economic value globally by 2035, with major impacts expected across pharmaceuticals, chemicals, finance, and logistics.
Google (NASDAQ: GOOG) added to the excitement when it unveiled its Willow chip, capable of performing calculations in under five minutes that would take one of the world’s most powerful supercomputers virtually forever to complete.
Unlike traditional computers, which use binary bits representing either 0 or 1, quantum computers use quantum bits, or qubits, which allow for exponentially faster processing of certain information types.
Qubits are extremely fragile and must be maintained at ultra-cold temperatures, and experts estimate millions of qubits will ultimately be needed for commercially useful programs.
Commercially viable quantum computing remains years away, though recent advances suggest the timeline could be shorter than previously expected, perhaps years rather than decades.
Some of the world’s largest technology companies, including Microsoft (NASDAQ: MSFT), NVIDIA, Amazon (NASDAQ: AMZN), and IBM, along with a growing number of startups, are actively developing quantum computers and related technologies.
Until last year there were only four publicly traded pure-play quantum companies, but since then three more have made their public debut, with many more reportedly planning listings in the near future, according to The Wall Street Journal.
Because it remains too early to identify long-term winners in the sector, a diversified approach through ETFs such as the Defiance Quantum ETF (QTUM), Global X AI Semiconductor and Quantum ETF (CHPX), and WisdomTree Quantum Computing Fund (WQTM) may offer a more measured entry point for investors.
