The Trump administration is talking about buying quantum stocks, according to The Wall Street Journal, as the White House expands its investments in sectors and industries it deems critical to national security.
The WSJ says the three stocks we feature below "are discussing the government becoming a shareholder as part of agreements to get funding earmarked for promising technology companies."
The Trump administration told CNBC it is not in talks with quantum computing companies. “The Commerce Department is not currently negotiating equity stakes with quantum computing companies,” a spokesperson said in a statement. The administration has taken equity stakes in semiconductor stock Intel (INTC) and mining stock MP Materials (MP).
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Less than a year ago, about a month before Trump was inaugurated for the second time, Google introduced a quantum computing chip, Willow, that engineers used to solve the hardest benchmark in the field. A post on the Alphabet (GOOGL) subsidiary's blog explains the significance of the achievement:
"Willow's performance on this benchmark is astonishing: It performed a computation in under five minutes that would take one of today's fastest supercomputers ... 10 septillion years. If you want to write it out, it's 10,000,000,000,000,000,000,000,000 years. This mind-boggling number exceeds known timescales in physics and vastly exceeds the age of the universe."
The announcement sent Alphabet stock soaring, with GOOGL finishing up more than 5% on December 10. It also ignited a massive rally for quantum computing stocks.
Now that the Trump administration has shown interest in sensitive economic sectors and industries, quantum computing stocks will continue to attract investors. Here, we take a closer look at the developing technology and how to invest in quantum computing stocks.
What is quantum computing?
Traditional computers encode information as 0s and 1s, essentially operating as an intricate network of on and off switches. This simple yet elegant binary design has powered decades of innovation and progress.
Quantum computing flips this model entirely. It steps into the fascinating, albeit spooky, world of quantum mechanics. Quantum computers use qubits, which can actually exist in multiple states simultaneously. This is known as "superposition."
"When qubits are entangled, what happens to one affects the others, even if they're separated," writes Mabel Oza, an adjunct professor at the University of Illinois at Chicago for blockchain and cryptocurrency and the founder of ChaChing Social. "This interconnectedness is key to the power of quantum computers."
The potential of quantum computing is enormous.
"Getting to large-scale quantum computing will enable the world to solve its biggest problems in minutes – in the time it would take today’s supercomputers to do in millions of years," said Karthee Madasamy, founder and managing partner at MFV Partners, founder and managing partner at MFV Partners. "That could create $850 billion in economic value by 2040."
As for investment opportunities, there are different ways to play quantum computing. One is to focus on big-cap technology stocks like Google, Nvidia (NVDA), Microsoft (MSFT) and IBM (IBM). But the impact of quantum computing technology on their income statements and balance sheets may be muted because they have other large revenue streams.
There are emerging pure-play companies in the category, including some that are publicly traded.
Let's take a look at three of them.
Rigetti Computing
Founded in 2013, Rigetti Computing (RGTI) has deployed 17 quantum computing systems. Rigetti uses cutting-edge techniques such as alternating-bias assisted annealing and multiple processors that provide high levels of accuracy.
This is the result of heavy investments in R&D. Among its 140 employees, 49 hold Ph.D.s. Rigetti has also amassed a portfolio of 237 issued and pending patents for quantum engineering, fabrication and algorithms
Last December, Rigetti announced its 84-qubit Ankaa-3 system achieved a median two-qubit gate (2QG) fidelity of 99.5%.
"This measures how accurate a quantum computer is by testing the performance of a two-qubit gate under different conditions," Professor Oza notes. "It's a key operation in quantum computing and is essential for connecting qubits and enabling complex calculations."
Rigetti reported second-quarter revenue of $1.8 million, down from $3.1 million a year ago, as its net loss expanded to $39.7 million from $12.4 million.
Management also announced that what it calls the industry's largest multi-chip quantum computer, the Cepheus-1-36Q, has been released for general availability on its cloud platform and will soon be accessible via Microsoft (MSFT) Azure.
As of June 30, Rigetti had cash, cash equivalents and available-for-sale investments of $571.6 million.
IonQ
After more than two decades in the academic world, Chris Monroe and Jungsang Kim cofounded IonQ (IONQ) in 2015.
Monroe and Jungsang licensed critical technology from the University of Maryland and Duke University. The co-founders also went on to raise capital from New Enterprise Associates, Google, Amazon.com (AMZN) and Samsung Electronics.
IonQ has built an impressive IP (intellectual property) portfolio and now controls more than 600 U.S. and international issued and pending patents.
The focus on R&D has certainly paid off. In September, IonQ announced its next-generation system, which achieved a 2QG fidelity level of 99.9%. The company says it will get to 99.999% by the end of 2025.
As a sign of IonQ's strength, the company has been able to snag a variety of key partnerships, including deals with AstraZeneca (AZN), ANSYS (ANSS) and the United States Air Force Research Lab.
In August, IonQ said its second-quarter revenue beat its top-end guidance by nearly 15%, rising to $20.7 million from $11.7 million a year ago.
Management also expects its $1.075 billion acquisition of Oxford Ionic to close this year. According to IonQ's press release, the acquisition will combine its tech stack with Oxford Ionics' "groundbreaking" ion-trap technology manufactured on standard semiconductors.
Even after the transaction there's more than $140 million in cash on IonQ's balance sheet.
D-Wave Quantum
D-Wave Quantum (QBTS) got its start back in 1999. The company's co-founders from the University of British Columbia saw a need for innovation with qubit designs.
Getting to commercialization has certainly taken some time. Then again, the industry has only gained traction with customers in recent years.
"One of the most positive trends we're seeing at D-Wave is the growing number of customers moving applications into production," said CEO Dr. Alan Baratz. "Because we offer annealing quantum computing, a type of quantum computing that is uniquely suited for solving complex optimization problems and is commercial-grade now, our customers are realizing value from the technology today."
Customers are seeing considerable benefits. In a pilot test with Japan's largest mobile phone operator, NTT DOCOMO, D-Wave's systems reduced paging signals during peak calling times by 15%.
D-Wave reported second-quarter year-over-year revenue growth of 42% and a corresponding 42% rise in profit margin. The company also boasts its highest cash balance ever at more than $800 million.
Is there an ETF for quantum computing?
In his keynote address at CES 2025 in January, Nvidia CEO Jensen Huang said that effective quantum computers wouldn't hit the market until 15 to 30 years from now, sparking a sell-off in quantum computing stocks.
Huang more recently apologized for those comments and invited several CEOs of quantum computing firms to Nvidia's first-ever "Quantum Day" at its annual GTC conference.
And in late March, Julian Kelly, Google Quantum AI's director of hardware, gave his timeline for quantum computing, saying practical applications of the technology are roughly five years out.
For investors, the bottom line is to remain cautious, as quantum computing stocks have proven themselves to be highly volatile. If you choose to invest in the developing industry, make sure to do so with money you can afford to lose.
For those who are more risk-averse but still curious, there is an exchange-traded fund for quantum computing: the Defiance Quantum ETF (QTUM).
Top holdings include Rigetti and D-Wave, as well as some large-cap stocks such as Palantir Technologies (PLTR) and Intel (INTC).
You can learn more about QTUM at the Defiance ETFs provider site.
Related content
-
A Lesson From the School of Rock About the MarketsIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I retired at 65 with $7.8 million and feel like I over-saved. My 40-something son is on the same path. Should I tell him to reconsider?We ask financial experts for advice.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and Around
It's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
Dow Adds 472 Points After September CPI: Stock Market TodayIBM and Advanced Micro Devices created tailwinds for the main indexes after scoring a major quantum-computing win.
-
October Fed Meeting: Live Updates and CommentaryThe October Fed meeting is a key economic event, with Wall Street waiting to see what Fed Chair Powell & Co. will do about interest rates.
-
The Delayed September CPI Report is Out. Here's What it Signals for the Fed.The September CPI report showed that inflation remains tame – and all but confirms another rate cut from the Fed.
