Key Takeaways IONQ is poised for long-term upside as quantum growth moderates in 2026 after rapid expansion in 2024-2025.IBM advances quantum progress with new processors, Qiskit expansion and DARPA benchmarking targets for 2026.D-Wave Quantum shows early optimization traction, but annealing systems remain exposed to funding cycles.Quantum computing remains in a nascent yet strategically critical phase, with global revenues projected to reach $2 billion this year (as per an investing.com report), driven lar ...

Core Insights - Quantum computing is emerging as a transformative technology, with significant investor interest reflected in the stock prices of companies like Rigetti Computing [1] - The year 2026 may serve as a reality check for quantum computing investments, suggesting a shift in focus from newer companies to established players like IBM [2] Company Insights - Rigetti Computing is recognized for its superconducting quantum computing technology, with its Cepheus-1-108Q system expected to be the largest modular quantum computing system available by the end of Q1 2026 [4] - Rigetti's manufacturing capabilities are highlighted, as it has established the first dedicated foundry for quantum integrated circuits, positioning itself as a leader in design and fabrication [5] - Despite its potential, Rigetti faces challenges, including ongoing financial losses, with reported revenue of only $1.9 million in the latest quarter, and competition from other companies using similar superconducting technology [6] IBM Insights - IBM is a major competitor to Rigetti, boasting over 300 clients and partners, and has developed the widely used Qiskit software for quantum computing [7][8] - IBM's Quantum Nighthawk QPU, which supports 120 qubits, has already been released, while Rigetti's system launch has been delayed [8] - IBM aims to achieve quantum advantage by 2026 and has plans for a fault-tolerant 200-qubit quantum computer by 2029, with aspirations for systems supporting up to 2,000 qubits beyond 2033 [9] - Financially, IBM is well-positioned, expecting a free cash flow of around $14 billion for the full year 2025, with a cash position of $14.9 billion at the end of Q3 2025 [10] Investment Perspective - While Rigetti Computing has long-term potential, its success is contingent on its technology matching or exceeding that of competitors [11] - IBM's diversified business model allows it to remain successful even if its quantum computing investments do not yield immediate results, showcasing its adaptability in the evolving tech landscape [11] - Overall, IBM is viewed as the more strategically positioned company in the quantum computing race compared to Rigetti [12]

Core Insights - The global quantum computing competition is intensifying, with countries like the US, EU, and Japan elevating quantum computing to a national strategy, focusing on legislation, substantial investments, and international collaboration [3][4] - China has made significant strides in quantum computing, establishing itself in the first tier of the industry, but faces challenges in technology breakthroughs, supply chain security, and standardization [1][4] - The success of quantum computing depends on building a sustainable, full-stack ecosystem rather than just the parameters of individual machines [1][7] Investment and Strategic Initiatives - The US has invested approximately $6.078 billion over seven years through the National Quantum Initiative Act, while the EU plans to invest around $1.1 billion from 2018 to 2027 under its Quantum Technology Flagship program [3] - Japan has earmarked 1.05 trillion yen for quantum technology, designating 2025 as the "year of quantum industrialization" [3] - South Korea has allocated 198 billion won for quantum technology in 2025, indicating a global trend towards comprehensive breakthroughs in quantum computing [3] Technological Development - The focus is on six core capabilities: quantum chip systems, quantum computing measurement and control systems, quantum computing environmental support systems, quantum operating systems and software, quantum computing cloud platforms, and quantum application software [3][4] - China is advancing its quantum computing capabilities with a focus on "self-controllable" technology, achieving several independent results in the six core capability areas [4][5] Ecosystem and Collaboration - The US and EU are building ecosystems centered around operating systems, with companies like IBM and Google leading the way in standardization and collaboration [4][5] - China's quantum computing cloud platform is rapidly developing, providing low-cost access to quantum computing for various industries, thus promoting application exploration [5][6] Challenges and Barriers - The core technology barriers in quantum computing stem from its high specialization, requiring significant R&D investment and long-term technical accumulation [8][9] - The ecological barriers arise from the interdependence of hardware and software, with leading global companies creating user stickiness and technological moats [9][10] - Standard barriers are critical for industry dominance, with the US and EU actively working on international standards that could dictate future developments [9][10] Future Directions - Experts suggest that China should focus on three essential capabilities: quantum chips, measurement and control systems, and operating systems, to achieve breakthroughs [11][12] - A coordinated national strategy is recommended to foster innovation and industry cultivation, ensuring that China can compete effectively in the global quantum landscape [11][12] - The development of a shared ecosystem between research and industry is crucial for advancing quantum applications in key sectors like biomedicine and finance [12]

Core Insights - Quantum operating systems and software are essential for driving the quantum computing industry ecosystem, acting as a critical hub that connects hardware and application software development [1][3] - The global competition in quantum computing has shifted from hardware performance to a comprehensive evaluation of the entire technology stack and industry ecosystem, with operating systems playing a pivotal role in determining competitive advantage [1][2] Group 1: Importance of Quantum Operating Systems - The core value of quantum operating systems lies in their ability to efficiently manage and schedule quantum resources, providing a unified development interface and runtime environment for upper-layer applications [2] - Quantum operating systems face higher technical challenges due to the unique properties of quantum bits, such as superposition and entanglement, as well as the fragility of quantum states [2] - Once a quantum operating system achieves market dominance, it creates strong ecosystem stickiness, binding developers and the upstream and downstream of the industry chain, which can have a profound impact on future industry development [2] Group 2: Domestic Developments in Quantum Operating Systems - China has made significant breakthroughs in quantum computing operating systems, with "Benyuan Sinan" being a benchmark achievement, representing the first domestic quantum operating system that integrates quantum and classical computing architectures [3] - The current version 4.0 of this operating system focuses on the integration of quantum computing capabilities and has effectively addressed key challenges in resource management and task scheduling [3] - The accompanying QPanda programming framework covers the entire process from algorithm design to runtime monitoring, significantly lowering the barriers to quantum computing development [3] Group 3: Investment Attributes and Challenges - Quantum operating systems and software possess high barriers to entry, strong demand, and high growth potential, making them a core entry point in the quantum computing ecosystem [4] - The development of these systems requires overcoming challenges related to quantum-classical resource collaboration and multi-hardware adaptation, with significant head effects in a competitive landscape [4] - Despite the promising growth, challenges such as a small ecosystem scale and insufficient hardware-software collaboration in China's quantum computing sector remain significant [4]

Core Insights - Quantum computing is a rapidly evolving technology that has the potential to revolutionize various fields, including drug discovery, materials science, and cryptography, by enabling computations beyond the capabilities of current supercomputers [2] - Despite its promise, quantum computing is not yet commercially viable due to high error rates and the sensitivity of qubits to external interference [3][5] - Major tech companies are investing in quantum computing, providing alternative investment opportunities beyond pure-play start-ups [9] Group 1: Technology Overview - Quantum computers utilize qubits, which can exist in superposition, allowing for complex calculations that classical bits cannot perform [3][4] - The primary challenge in quantum computing is maintaining qubit stability and reducing error rates, as even minor environmental changes can lead to incorrect results [5][7] - Companies are exploring various methods to create fault-tolerant quantum computers that can manage and correct errors effectively [8] Group 2: Key Players - IBM is heavily invested in quantum computing, developing two chips: Nighthawk, aimed at advanced simulations, and Loon, which targets large-scale fault-tolerant quantum supercomputing [10][11] - IBM is also focused on error mitigation tools and has developed a software stack, Qiskit, to facilitate practical applications of quantum computing [12] - Nvidia and Alphabet are also significant players in the quantum space, with Alphabet achieving a breakthrough in error reduction with its Willow chip [13] - Nvidia is not developing its own quantum chip but is creating systems to integrate traditional and quantum computing, including NVQLink for real-time error correction and an open-source software platform called CUDA-Q [15][16]

Core Insights - Quantum computing is poised for significant growth, with projections estimating a market size of $100 billion over the next decade [2] Group 1: Companies in Quantum Computing - **Nvidia**: A leader in GPU technology, Nvidia is exploring quantum computing to enhance AI capabilities. The company has developed NVQLink and CUDA-Q to integrate quantum processors with AI supercomputers, positioning itself at the intersection of current and future computing technologies [4][5][7] - **IBM**: Despite being seen as a legacy company, IBM has adapted by focusing on hybrid cloud computing and quantum technology. It has generated over $1 billion in lifetime revenue from quantum computing and offers Qiskit, a widely used software development kit [8][9][11] - **Microsoft**: A major player in technology, Microsoft is investing in quantum research, having developed the Majorana 1 chip capable of housing 1 million qubits. The company’s strong market presence and resources position it well for future advancements in quantum computing [12][13][15]

Core Insights - Pure-play quantum computing stocks such as Rigetti Computing (RGTI) and D-Wave Quantum (QBTS) experienced significant gains in early 2025, with QBTS rising 157% and RGTI increasing by 49% due to investor enthusiasm for early-stage breakthroughs and potential revenue streams [2] - Recently, the momentum for these stocks has diminished, with QBTS gaining only 2.3% and RGTI losing 24.9% from October 2025 to date, as large tech companies like Amazon and IBM gained investor favor due to their established business models and quantum initiatives [3][4] Quantum Computing Market Dynamics - Analysts have indicated potential further downside for pure-play quantum stocks as revenue scale and sustainable profitability are still years away, making it challenging to project significant gains for 2026 [4] - Large technology firms such as Amazon and IBM are positioned to benefit from quantum computing due to their diversified and profitable business models, allowing them to invest in quantum initiatives without relying on immediate monetization [8] Company-Specific Developments - Amazon Web Services (AWS) is advancing quantum computing through its Braket platform, which provides access to various quantum devices and has introduced the Ocelot chip for improved error correction efficiency [9][10] - IBM's quantum strategy includes the Quantum Nighthawk, a 120-qubit processor aimed at achieving scientific quantum advantage by the end of 2026, supported by its open Qiskit software and partnerships [13][14] Financial Projections - Amazon is projected to report a 2026 earnings growth of 9.5% on revenue growth of 11.3%, with a Zacks Rank of 2 (Buy) [10] - IBM is expected to achieve a 2026 earnings growth of 7.5% on revenue growth of 4.9%, also holding a Zacks Rank of 2 [15]

Core Insights - IBM has partnered with Cisco to create a fault-tolerant quantum computing network by 2030, aiming to establish a quantum computing Internet that connects various quantum technologies [1][7] - IBM will develop a quantum networking unit (QNU) to link quantum computers to a quantum processing unit (QPU), while Cisco will create a high-speed software protocol for dynamic network reconfiguration [2][3] - The collaboration is expected to enhance the scalability of quantum networks, facilitating technological innovations in the quantum ecosystem [3] IBM's Quantum Computing Focus - IBM has previously partnered with AMD to develop scalable, open-source platforms for quantum-centric supercomputing, enhancing algorithm complexity in quantum hardware [4] - Recent updates to IBM's Qiskit software platform have improved accuracy by 24% at the scale of over 100 qubits, providing developers with enhanced control [5] Financial Performance - IBM's stock has increased by 35.7% over the past year, outperforming Amazon (10.7%) and Microsoft (14.1%), although the industry as a whole grew by 61.2% [6] - Earnings estimates for IBM for 2025 have risen by 7.1% to $11.39, and for 2026 by 8.8% to $12.23, indicating positive investor sentiment [8] Challenges and Strategic Adjustments - Despite growth in hybrid cloud and AI, IBM faces intense competition from AWS and Microsoft Azure, leading to margin pressures and declining profitability [10] - The company is implementing significant job cuts, with many positions being relocated to India to reduce operating costs [11][13] - High operating costs and competition are hindering IBM's growth, although the company maintains a focus on quantum computing and AI to drive value [15][16]

Core Insights - Quantum computing is rapidly advancing, with significant breakthroughs occurring that may lead to real-world applications sooner than expected [4][5][6] - Major tech companies are investing heavily in quantum computing, indicating a growing recognition of its potential [2][11] - The Defiance Quantum ETF offers a diversified investment opportunity in the quantum computing sector, making it a practical choice for investors [3][10][15] Investment Landscape - The Defiance Quantum ETF includes top holdings such as Rigetti Computing ($73.3 million), Tower Semiconductor ($72.8 million), and Micron Technology ($60.3 million), among others [8] - The ETF was launched in 2018 and invests in approximately 70-80 stocks across various sectors related to quantum computing, with a reasonable expense ratio of 0.40% [10][12] - JPMorgan Chase, IBM, and Microsoft are among the companies committing substantial funds to quantum computing, with IBM planning to invest $30 billion in R&D [11] Market Dynamics - The rapid development in quantum computing mirrors the early days of AI, suggesting that early investment could yield significant returns [6][7] - The Defiance Quantum ETF's equal-weighted portfolio helps mitigate concentration risk, making it a safer option for investors looking to enter the quantum computing space [12][14] - The ETF's strategy of investing in a broad range of companies may be preferable for those looking to minimize risk in a high-growth, emerging sector [15]

Core Insights - IBM has launched the IBM Quantum Nighthawk, the most advanced quantum processor to date, which allows for 30% more complex quantum circuits compared to its predecessors [1][8] - The new quantum processor is expected to enhance algorithm complexity and could lead to significant technological advancements in the quantum ecosystem [2] - IBM is upgrading its Qiskit software platform to improve performance and accuracy, achieving a 24% increase in accuracy for circuits with over 100 qubits [3][4] Quantum Technology Developments - The IBM Quantum Nighthawk processor enhances qubit connectivity, enabling users to execute more complex quantum circuits [1] - The evolution of Qiskit from a simple SDK to a comprehensive quantum software stack aims to maximize the performance of IBM's quantum hardware [3] - The latest Qiskit version introduces a new execution model that improves error mitigation, reducing the cost of obtaining accurate results [4] Financial Performance - Over the past year, IBM's stock has increased by 50.7%, outperforming Amazon (15.5%) and Microsoft (19.8%), but lagging behind the industry average growth of 75.8% [5] - Earnings estimates for IBM have risen by 6.2% for 2025 and 7.1% for 2026, indicating positive investor sentiment [8][10] Market Position and Challenges - IBM is experiencing strong demand in hybrid cloud and AI sectors, which are expected to drive growth in its Software and Consulting segments [6] - Despite positive trends, IBM faces significant competition from Amazon Web Services and Microsoft Azure, leading to margin pressure and declining profitability [12] - The company is implementing job cuts as part of a strategy to reduce operating costs, with many positions being shifted to India [13] Strategic Outlook - IBM's focus on hybrid cloud and AI, along with improving earnings estimates, is contributing to a positive investor perception [14] - However, high operating costs and competitive pressures are challenges that could impact future profitability [15]