While the world is fascinated today by artificial intelligence there is another technology in the wings with much more potential to change the world and provide both opportunities and risks for your investing and investments. The next new thing is quantum computing which, when fully operational, will help create new medicines, cure diseases, and threaten every bank transaction, crypto wallet, or anything else that uses an encryption algorithm on earth. Our question is what is what are the best quantum computing investments to stay out in front of this.
What Is Quantum Computing?
Quantum computing is based on quantum mechanics the laws of physics at the level of atoms and even sub atomic levels. The laws of physics as discovered by Isaac Newton in the late 17th century are understandable using standard mathematics including calculus, which Newton invented. However, quantum mechanics describes the tiniest of worlds where Newton’s laws of physics do not apply. At the quantum level photons and electrons simultaneously behave as matter and energy. Superposition at this level of quantum mechanics means that a particle can be in several locations as well as several states all at the same time. While this branch of physics is so complicated it is also the basis of modern technologies including smartphones, lasers, MRI scanners and computing. Standard computing uses binary code made up of ones and zeros. Because so many quantum states can exist simultaneously, quantum computers numerous states can be processed at the same time not having to rely on “just” the two states of one or zero. This aspect of quantum mechanics as well as entanglement (connection) of states allow quantum computers to solve difficult problems in hours or minutes that might take standard supercomputers hundreds or thousands of years. It is a fair estimate that fully functioning quantum computers will be able to break today’s encryption codes of 248 bits in days instead of millions of years for the fastest non-quantum super computers of today.
How to Invest in Quantum Computing
The good news is that you do not need to be a nuclear physicist with a thorough understanding of quantum mechanics in order to profit from this developing technological niche. Like with all new technologies, you can invest in companies the make quantum computers, those that provide quantum computing services or companies that use quantum computing technology to make their businesses more efficient and more profitable.
Image Courtesy of IBM Website
Safe Quantum Computing Investment Bets
IBM has been working with quantum computing technology and building computers for years. Likewise, Microsoft and Alphabet are tech giants that are already making quantum computers and offering computing services. Because the technology has not fully matured investments in any of these companies will provide an income stream but will dilute the “quantum” aspect of your investment both in regard to risk and profit.
Potential Quantum Computing Homeruns with Increased Investment Risk
If you are willing to accept the risk and are looking for a greater return on investment than with the likes of Alphabet, Microsoft, or IBM there are companies that are more nearly pure quantum computing investments. These companies create the software and hardware for quantum computing. They include IonQ, D-Wave Quantum, and Rigetti Computing. Nvidia Is also a reasonable bet as they offer the CUDA-Q platform that provides both quantum and standard computing. However, they are like the other tech giants in that your quantum investment will be somewhat diluted.
IONQ sold for $11 a share when it debuted at the start of 2021 and sells in the $70 range today. D-Wave Quantum sold for $10 a share at the end of 2020 and sells in the $30 range today. Rigetti Computing sold for just under $10 at the start of 2021 and sells in the $20 range today. None of these stocks is overly expensive. It remains to be seen where any of these companies will fit in the world of quantum computing yet to come. They embody the issue with tech that Warren Buffett spoke about often. Tech can change so quickly that what looks promising and profitable one year can become outdated within a couple of years. To the extent you are able, it might be best to diversify your quantum computing investments including both big tech “sure thing” giants and one or two of the riskier companies with potential for a home run, or two.