Quantum Computing Stocks Are Having a Moment
Quantum computing is like high school sex. Everyone says they’re doing it because they think everyone else is. For the few that are, it’s not as great as they say it is. And the only people that actually know how to do it properly are the teachers who never really talk about it.
That old joke works better with quantum computing than any other technology. Like fusion and molten salt reactors, quantum computing is always five to ten years away. Every so often, some company dabbling in the stuff will make some big announcement, so we’ll do our yearly update and lament how nothing ever happens. Will this time be any different?
A List of Quantum Computing Stocks
In trying to come up with a name for this article, we noticed that a lot of people are looking for a list of quantum computing stocks to invest in, or even “the best” quantum computing stock to invest in. Try to ask Google for a list of quantum computing stocks and you’re likely to be fed some Foolish list of stocks like this:
The person who put that list together is no slouch. He’s a registered investment advisor, he owns his own consultancy, and he’s an experienced writer who enjoys time outdoors with his wife and rescue dog. When his editor asked for a piece on investing in quantum computing stocks, he had to come up with something. But he also made sure to correctly point out that that only one stock on his list would be considered a quantum computing stock – IonQ. What he didn’t mention is that their merger with a special purpose acquisition company (SPAC) called dMY Technology Group, Inc. III (DMYI) has yet to be finalized.
IonQ plans to merge with a SPAC, but until that happens, you don’t own shares of IonQ. While most SPAC deals do successfully close, we’ve seen some stall lately as they wait for shareholders to get off their asses and vote. Once the ticker changes from DMYI to IONQ, then you’ll know the deal has been completed.
In our piece on IonQ – A Publicly Traded Quantum Computing Stock, we wrote about how the company “expects to deliver its first edge-deployed quantum computer within the next 18 months.” More important to watch for are the $5 million in revenues they’re expecting for 2021. When the IonQ merger completes, it will become the first pure-play publicly traded quantum computing stock ever. (If there’s some OTC micro-cap stock you think we “missed,” just save your breath. We don’t dabble in penny stock garbage.) We’ll take another look at this company once the merger has been completed and they’ve filed some proper regulatory documents.
The next company on the list, Microsoft (MSFT), is a $2 trillion tech giant that dabbles in quite a few things including quantum computing. Earlier this year, Wired published a piece talking about a breakthrough in 2018 that Microsoft had which turned out to be an error. The leader of Microsoft’s quantum computing research, Matthias Troyer, recently spoke with HPCwire about how “classical computers enjoy a roughly billion times advantage (op/s) over quantum systems at the moment.” He goes on to talk about “quantum-inspired algorithms that are already reaping benefits on classical systems,” and says there are certain complex problems we can only solve with quantum computers.
It’s an interesting interview, but doesn’t provide any color as to when a quantum computer might be available from Microsoft, or any other company for that matter. For now, Microsoft’s Azure Quantum lets you access “a diverse set of quantum technologies.”
Amazon (AMZN) dabbles in a whole lot of things, quantum computing being one of them. A May 2021 article by The Next Platform talks about how Amazon doesn’t have hardware, but could own the software side because “the real differentiator will be accessibility and service.” If that’s the case, then so can any other cloud computing provider. An April 2021 article by IEEE Spectrum talks about how Amazon “has unveiled a new theoretical blueprint for a quantum computer based on combining hardware versions of lots of Schrödinger’s cats.” It sounds pretty far away because it is. Says Oskar Painter, head of Amazon Web Services (AWS)’s quantum hardware program:
“We’re looking at a plethora of different options right now,” Painter says. “It’s still rather early in development—if we get too siloed in one direction, it could be significantly limiting.”Credit
The old “we’re still looking at all the available options” statement can buy you at least a few more years before you move to the “we’re five years away from something meaningful” statement.
We just can’t be asked to call Google (GOOG) Alphabet, no matter how hard we try. The big news from Google lately was their claim of creating a quantum crystal. Try as we might, we couldn’t find a single article that could properly describe this accomplishment. Everyone starts out saying how difficult the concept is to describe, then fails miserably at explaining it. So, we asked Google “what is a time crystal in layman’s terms” and here’s what they said:
A time crystal is a special phase of matter that changes constantly, but doesn’t ever appear to use any energy.Credit: Google
Got it. This is from the same company that claimed quantum supremacy several years back, something we wrote about in a piece titled Has Google Finally Achieved Quantum Supremacy? According to an article by Quanta Magazine, that breakthrough is responsible for their new quantum creation.
Shareholders shouldn’t be asked to fund something that can’t be explained. Perhaps they can hire another adventure cartoonist to explain what’s happening, or let the CEO comment on it once he’s done dealing with all the unruly activists masquerading as artificial intelligence ethicists.
We’ve written extensively about the biggest semiconductor company in the world, mostly surrounding their use of AI chips in 97.4% of all data centers in the world. While NVIDIA (NVDA) chips can also be found in 70% of all supercomputers, we’re talking apples and oranges, something we covered in our piece on Quantum Computers vs. Supercomputers vs. Mainframes.
This past spring, NVIDIA disclosed their intent to dabble in quantum computing with the launch of cuQuantum SDK, “a development platform for simulating quantum circuits on GPU-accelerated systems.” That’s according to an article by HPCwire that notes NVIDIA CEO Jensen Huang emphasizing in his recent keynote that NVIDIA doesn’t plan to build quantum computers, but thinks GPU-accelerated platforms are the best systems for quantum circuit and algorithm development and testing.” Remember how high school students say they’re doing something only because everyone else is?
Honeywell (HON) has been working closely with a private company, Cambridge Quantum Computing, and just weeks ago announced the formation of a new company. Honeywell Quantum Solutions (HQS) and Cambridge Quantum (CQ) will combine to form a new company (yet to be named) that Honeywell will invest between $270 and $300 million in. Honeywell will be the majority shareholder of the new company, and CQ’s shareholders will own over 45% of the new company. Both companies continue to announce new milestones – most recently, a quantum volume of 1,024 and significant error correction advancements – since Honeywell announced their first commercial quantum computer back in March 2020.
IBM (IBM) is just now getting over the massive hangover they had from drinking too much Rometty Kool Aid, but their new CEO has quantum computing in his sights. In IBM’s Q2-2021 earnings call a few weeks back, CEO Arvind Krishna said, “to help business and society reap the benefits of quantum computing, we have put a road map in place to build 1,000-plus qubit computer by 2023.” (Makes note in calendar.)
More Quantum Computing Stocks
Intel is another name we’ve come across while researching quantum computing. Back in 2017, the four companies said to be ahead in the race were Microsoft, Intel, Google, and IBM. In looking at what Intel (INTC) has been up to, their latest press release in May 2021 talks about “progress toward quantum scalability with high-fidelity control and programmability of silicon qubits using the Horse Ridge cryogenic controller.” Apparently, it marks an important milestone in addressing one of the biggest challenges to quantum scalability. More importantly, the press release serves as a justification to senior management as to why they’re working on quantum computing in the first place and provides their team of quantum researchers at least a few more years of job security.
Quantum Computing Inc.
Last, and definitely least, is a firm that recently up-listed from the OTC exchange to the Nasdaq Capital Market, having come up with the absolutely perfect company name for search engine optimization – Quantum Computing Inc. (QUBT). That’s about all they have, as the $230 million company has not recorded any revenue from sales of products or services to date. Avoid like the plague for reasons given in our follow up piece on this company titled Why Quantum Computing Inc. QUBT Is Not a Good Stock.
Private Quantum Computing Companies
A vast majority of what’s happening in quantum computing remains in the world of startups where we have no visibility into the progress being made. Names we’ve looked at include:
- PsiQuantum, Quantum Machines, Seeqc, ProteinQure
- D-Wave, 1QBit, Cambridge Quantum Computing, QxBranch, Rigetti Computing, QuintessenceLabs
- Bleximo, Q-CTRL, ColdQuanta, QC Ware, Strangeworks, Zapata Computing, Xanadu, GTN Limited, Qindom, Intelline
- Optalysys, MagiQ, Eagle Power Technology
Of those names, only one can be found milling about on the CB Insights Unicorn Farm, munching through mounds of 100-dollar bills.
Silicon Valley’s own PsiQuantum recently raised a monster $450 million round at a valuation of $3.15 billion, now having raised $665 million in disclosed funding. You’ll never guess what the funding is being used for – to build the world’s first commercially viable quantum computer. The PsiQuantum approach uses silicon photonics, and they’ve partnered with GlobalFoundries, a U.S.-based semiconductor manufacturer that Intel is looking at buying. The two companies are now manufacturing the silicon photonic and electronic chips that form the foundation of the Q1 system, but no timeline has been given as to when we can expect a working 1 million qubit quantum computer. It’s probably safe to say it’s five years away. Investors include BlackRock, Baillie Gifford, and Microsoft.
Here’s some more recent news about new quantum computing startups on the scene, all of which happen to be across the pond:
- Quantware – Netherlands startup that’s now selling quantum processors based on transmons, superconducting loops of wire that are similar to what’s being used by Google and IBM. $1.4 million in disclosed funding.
- IQM – Finnish startup that’s one of a few European startups focused on quantum computer hardware. Plans to start delivering to customers “next year.” $83.28 million in disclosed funding.
- Riverlane – Cambridge, U.K, startup building ground-breaking software to unleash the power of quantum computers. $24.1 million in disclosed funding.
- Quantum Motion – From Leeds, U.K., this firm is building a universal quantum computer in Silicon, using CMOS compatible processes. $9.8 million in disclosed funding.
- Pasqal – French firm building quantum processors for use in complex computing challenges. $30.4 million in disclosed funding.
With the SPAC train running at full steam, we wouldn’t be surprised to see other companies follow IonQ onto the public markets, something that’s ill advised. We’ve covered over 50 SPACs now and not one can be found in our portfolio. This late in the game, SPAC operators are desperate to find acquisition targets, and retail investors will benefit the least from that desperation.
While we’ve mainly focused on U.S. and European companies, there are many other countries focused on quantum computing, both commercially and academically. One of these is China.
An article last month by Tech Wire Asia claims that the Chinese have now displaced Google with “the world’s most powerful quantum computer,” but who exactly said that was Google’s title to hold in the first place? What’s not in dispute is China’s desire to be a leader in all things technology. Alibaba is said to be dabbling in quantum computers with a focus on quantum cryptography which will be used by Alipay and Ant Financial. Baidu is offering a cloud-based quantum infrastructure service called Quantum Leaf, and Tencent has their own Quantum Lab that’s doing quantum stuff. Being the secretive types they are, the Chinese are likely to keep their quantum cards very close to their chests. In fact, just about everyone might be.
Quantum Supremacy Secrecy
As everyone waits for a quantum computer to get built, others are making some amazing progress with algorithms that are hardware agnostic. For example, quantum computers were supposed to demonstrate quantum supremacy by folding proteins, but machine learning algorithms have now sorted that out.
A few years back, we took a business trip to Vancouver B.C. to
smoke weed and mountain bike look for interesting startups to interview. One person we met with was Landon Downs, Co-founder and President of one of the world’s leading quantum computing software companies – 1QBit – who talked to us about How Quantum Computing Software Gets Built. One key point he made was that whoever achieves quantum supremacy won’t be incented to share that accomplishment with the rest of the world. In fact, it’s very likely they won’t.
The press releases you see coming from the FAMGA lot are likely just public relations driven as opposed to being a reliable indicator of progress being made. Whoever develops the first working quantum computer will likely want to use it for their own benefit and not tell anyone else. That doesn’t bode well for retail investors trying to find the best quantum computing stock.
Another thing Mr. Downs talked about was progress being made using quantum-inspired algorithms. He mentioned how Matthias Troyer at Microsoft took a problem that would take 30,000 years to solve, then developed an algorithm to solve it in 30 years. More recently, he developed an algorithm that can solve the same problem in minutes. Regardless of how long it takes for humans to build a working quantum computer, the progress being made certainly seems worth the investment.
Google may have developed a quantum crystal thingy, IonQ may become the first publicly traded quantum computing stock, and companies like PsiQuantum may be taking in large funding rounds, but we’re still no closer to a working quantum computer than when we last checked. And if we are, it’s likely we’re not going to know about it.
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Unfortunately, this piece is full of many great points.
Unfortunately, we agree with you.
See article from Nature (.com) : “Quantum gold rush: the private funding pouring into quantum start-ups”
A few years old but still some interesting info. Thank you for posting.
I have also 2 quantum computing stocks DMYI (-10%) and QUBT (+370%). I follow QUBT for 1.5 years
QUBT is OTC junk. Your paper returns are irrelevant to the quality of the company. We’ll gladly write a piece exposing all the red flags for you to see. It’s now teed up with our research team so stay tuned!
Not all OTC is junk I think 98 %,now QUBT in on NASDAQ.I Bought QUBT because : quality of management ,business plan,first to market advantage,PURE-PLAY,right timing ECT… Also I Bought EXPI (was on OTC) over 3 years ago for $5.35 average this one is next AMAZON in Real Estate please do research.I hope we can learn from each other.
We appreciate you taking the time to comment Zdzislaw. If 98% of the time we’ll lose money investing in something, we don’t waste our time looking for the 2%. In the case of Quantum Computing Inc., you don’t need to look very hard to find many red flags.
You mention the quality of management? You’re exactly right. The quality of management is a huge point of contention. Here’s what our research team found after spending just a few hours looking into this hot mess:
We strongly advise everyone to avoid investing in OTC garbage.
In the long run, you will lose all your money 98% of the time. We have countless examples of past failures we can point you to, so many in fact that we eventually became tired of writing about them.
However, when someone comes around making claims that some OTC stock is the next big thing, we’re more than happy to offer our services.
As for EXPI, let’s keep this conversation focused on what’s being discussed here – QUBT.
Thank you for the comment, and yes, we always learn from our readers as much as they learn from us. Your comment is what provoked our team to look into this, and we’re quite glad we did. Being able to warn people about pitfalls makes us feel all warm and fuzzy inside. We’re now taking going to spend a lazy Sunday afternoon drinking Zubrowka and apple juice.
Great article! Been trying to find more info about Quantum computing companies with no luck but you really broke down the current “players”. My heart wants IonQ to be a WINNER but my brain keeps telling me its a TRAP! Will probably follow my heart regardless and scoop up some shares and pray they actually build a working quantum computer and not just talk about it like everyone else. What is interesting though is that, as per Wikipedia, co-founder Christopher Monroe has been working in the Quantum field for over 20 years now, and was trained by a Nobel prize winner so hey maybe he is finally due?! Cheers!
Cheers for the feedback Eddie and additional info! The big test for IonQ is if they do what they said – $5 million in revenues for 2021. Looks like they’ll approve the business combo next month, so be sure to wait for that to happen so that you’re actually buying shares of IonQ. We’ll be keeping an eye on them for sure.
Trading on Nasdaq commenced on September 7, 2021 under the ticker “ARQQ”
Arqit Quantum Inc. (“Arqit”), a leader in quantum encryption technology, today announced the completion of its business combination with Centricus Acquisition Corp. (“Centricus”), a special purpose acquisition company. The business combination was approved at the extraordinary general meeting of Centricus’ shareholders on August 31, 2021 and closed today, September 3, 2021.
Today it is +140%.
Timely comment. We just published a piece on Arqit.
Looks like it’s not trading at +140% anymore. The whole thing reeks of manipulation.
PsiQuantum : “There are many ways to make small numbers of qubits, but only one way to scale beyond 1,000,000 qubits and deliver an error corrected general purpose quantum computer – and that is photonics.
Today, after numerous breakthroughs and advances in quantum architecture and silicon photonics, we uniquely have a clear path to building a useful quantum computer.”
We’ll look forward to that then.
Quantum Brilliance – a quantum startup based in Germany and Australia announced it has raised $9.7 million in seed funding to expand its use of synthetic diamonds as qubits.
Quantum Brilliance is taking a different approach to creating qubits by using synthetic diamonds to miniaturize quantum computers. The two most common approaches to quantum computing are superconducting transmon qubits and trapped-ion technology. The company says its projected roadmap to provide quantum accelerators the size of a lunchbox with over 50 qubits by 2025 will “greatly accelerate the adoption of useful quantum applications across a variety of sectors”. Quantum accelerators can be deployed wherever classical computers are used such as satellites, vehicles, hospitals, and robotic systems.
Noted in our research queue.
Quantum Motion is making significant progress. BTW: it is part of IP Group portfolio (IPO.L).
Recent article in theregister: “Quantum startup demos spin qubits fabbed with existing tech”.
“Startup Quantum Motion is joining the silicon spin qubit gang with its own technology that can fit thousands of quantum dots onto a single silicon chip fabricated in a commercial semiconductor foundry. The move marks another small step along the road to building full-scale fault-tolerant quantum systems.
The company, led by academics from UCL and Oxford University, claims it has achieved a significant milestone in measuring the state of the quantum devices on one of its chips, saying it has demonstrated that 1,024 quantum dots covering an area of less than 0.1mm2 can be measured within 12 minutes. “
Thank you for the info. Must be a very small position for IP Group as it doesn’t appear in their top-20 – so less than 1% of NAV. Publicly traded quantum computing stocks haven’t impressed much so far. It all comes down to building something other companies are willing to pay lots of money to access in a SaaS-like offering.