Artificial intelligence stocks suddenly had competition recently for investors' attention. It came from quantum computing stocks. But quantum stocks have been on a roller coaster as investors try to figure out the outlook of public companies such as IonQ, Rigetti Computing and D-Wave Quantum.
In 2025, IONQ stock has shed 7%, RGTI stock is down 19% and QBTS stock has retreated 32%.
So Investor's Business Daily turned to research firm Global Quantum Intelligence (GQI) for insights into recent quantum computing news.
Doug Finke, GQI co-founder and chief content officer, talks about quantum trends and related subjects, such as potential synergy with artificial intelligence, in this interview. He also comments on chipmaker Nvidia CEO Jensen Huang's views that meaningful commercialization of quantum technology could take 15 or more years.
As for market data, GQI forecasts a quantum addressable market in a range of $15 billion to $20 billion between 2025 and 2030.
The lion's share of that involves spending by government agencies, companies and organizations to protect their traditional computer systems because quantum computers are expected to eventually overpower current data encryption technologies. And, hackers could make use of that capability.
So cybersecurity systems will need new software algorithms to replace current public key encryption keys.
In this interview, Finke also talks about what advances are needed to commercialize quantum computers. They use quantum bits, called qubits, which are usually electrons, photons or other subatomic particles.
Quantum computers generate and control qubits to perform computations. As it stands, the most advanced quantum machines still only use hundreds of qubits, and scaling up the technology will be key.
This interview has been edited for clarity and brevity.
Quantum Stocks: Nvidia Backlash
IBD: Quantum computing stocks took a hit from the comments of Nvidia CEO Jensen Huang at CES 2025. He said it will be a long time before quantum computers are "truly useful." Do you think he's right?
Finke: I'm thinking that by truly useful he meant a time that quantum computers would have the same impact on society that (Nvidia) GPUs have today. If that's what he meant then maybe 20 years is correct.
But some in the industry read his comments as meaning quantum computers would be totally useless over the next 19 years and that's definitely not the case.
We're starting to see a trickle of applications. People are starting to take proof of concepts and put them in production. D-Wave is telling people they have a handful of customers in production now.
We may not see an overnight success like (OpenAI's) ChatGPT in artificial intelligence. Every year it's going to be a little more and maybe the knee of the curve is off a few years.
Quantum Stocks: Market Projections
For many smaller companies — if it's a $10 billion or $20 billion market and they can get a share of that — that's pretty significant. But maybe we probably won't see an overnight success. It is a difficult technology. The industry is making great progress but it's a long road.
IBD: QCI has projected a quantum addressable market in the range of $15 billion to $20 billion from 2025 to 2030. Where does that come from?
Finke: That's for all aspects of quantum and that includes quantum computing, quantum communication, quantum safe communication and quantum sensors.
One of the largest markets is this whole thing about the potential threat of future quantum computers on public encryption codes used on the internet. So there's going to be a lot of money spent to update IT systems in order to make them safe. The good news is that NIST (National Institute of Standards and Technology), a U.S. government agency, has gone through a competition and has approved a handful of new algorithms.
Then there are quantum sensors. There's a big concern about GPS (global positioning systems) in the military, about being able to navigate in GPS-denied environments where the enemy is jamming GPS. That's a small market part of the market — military and commercial aircraft.
And then, of course, there's quantum computing. It's the one, quite frankly, that gets a lot of press.
One of the concerns that people have about artificial intelligence is that the way it's done today is requiring tremendously large computer centers that require tremendous power. People are talking about setting up or reviving nuclear power plants.
Quantum Stocks: Artificial Intelligence Synergies
Processing AI with quantum computers might be much more energy efficient. The algorithms are different and you may not need things like Stargate, the $500 million dollar project just announced, to be able to do some very useful things.
IBD: So would quantum computing make it possible to achieve humanlike artificial general intelligence (AGI) much sooner? That's the endgame of many AI companies and researchers.
Finke: At this point I do not see anyone in the quantum industry talking about AGI. You shouldn't think of quantum as processing the same type of algorithms, but much faster, as classical computing. It's not a supercharger for classical computing. Quantum computing requires brand-new algorithms and new approaches. At some point quantum might be able to reduce the computational resources that are needed for AGI.
IBD: Given the exotic technologies used in quantum computing and the special environmental conditions required, will they be used by enterprises on premises in their own data centers or mainly available from cloud-computing services remotely?
Finke: Certain organizations and government agencies have data residency or data security issues where they really don't want proprietary data to go outside the building or outside the country.
Quantum Computing Stocks: Cloud Services Key
So there has been a pickup over the last year or two in regards to on-premise computers. In general, though, if you're some enterprise, a Fortune 500 company, with a team developing proof-of-concept cases, you're probably doing it through the cloud. Amazon Web Services, Microsoft and IBM all have access to quantum systems. It doesn't make sense if you're doing a proof of concept to purchase a quantum computer today unless you have some real security concerns.
Once some of those proof of concepts start going into volume production where they are used on an everyday basis, I could see some companies opting to purchase a machine on premise.
IBD: In industries like energy or health care, what are the emerging commercially useful applications for quantum computers? Are they mainly simulation-type applications?
Finke: Simulating chemical reactions, computational chemistry, we believe is probably going to be one of the applications that has the greatest impact on society. That includes things like drug discovery and material design — coming up with new vaccines, in the energy space anything that has to do with batteries. There's a big, big push with electric cars to come up with better batteries.
Long term, computational chemistry might be the largest market for quantum computers.
Quantum Computing Stocks: Scaling Up Qubits
IBD: How much quantum-related revenue is currently being garnered by everybody — by cloud-computing companies, by startups, by public companies?
Finke: In 2024, we estimate the market was about $1 billion. Almost all of it was really based on what I would call people developing proof of concepts. Very little was on a production basis.
It's very early. The (prototype) machines are still relatively small, with maybe about 100 qubits. In order to target some of the really big problems, you might need something like 20 million qubits. A lot of people are making investments now in terms of proof of concepts because they're confident that larger machines will be available over the next several years and they will be able to take what they learn on these proof of concepts and scale them up.
IBD: What approaches show the most promise?
Finke: There's actually almost a dozen different ways of building these qubits. Probably the one most heavily used today (is) superconducting qubits. That's what IBM uses, what Google uses, and that's what Rigetti uses.
Another one is called ion traps. There you have companies like IonQ and Quantinuum.
Quantum Stocks: Google Makes News
There's photonic-based systems where you use photons of light. Companies like PsiQuantum and Canada-based Xanadu are working on that.
It's sort of a horse race. There's a lot of different approaches. It reminds me of the early semiconductor days. If you go back 50 years, people were debating which of the semiconductor technologies, silicon or germanium or gallium arsenide, would win out. So there could be a very similar phenomenon with quantum.
IBD: Google recently made a splash with its Willow quantum announcement. Do you think breakthroughs will come from big tech giants, startups or universities?
Finke: All of those. There's a lot of innovation in terms of new techniques. Some of these large companies, like Google and IBM, are developing new technologies.
What may happen is that if a startup company develops something that's really good and effective — when you think about their exit strategy — they may not decide to go into the quantum-as-a-service. Instead they may do a partnership with a big company.
There have been acquisitions to acquire technologies. IonQ recently bought a quantum networking company called Qubitekk. There could be more of that in the quantum industry.
Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on artificial intelligence, cybersecurity and cloud computing.
