Quantum Computing Is Having a Moment. What to Know About the Hottest Sector After AI.

Just a decade ago, it was nothing more than the dream of scientists in the lab. Recent advances by IBM, IonQ, Nvidia, and others illustrate the new promise of the complex technology. Investors are taking notice.

The IBM Quantum System Two is the company’s most advanced quantum computer. (Photograph by Amy Lombard)

Key Points

• Quantinuum’s initial public offering and a wave of listings this year signal that quantum computing is moving closer to real uses.
• Pharmaceutical firm Amgen and healthcare provider Cleveland Clinic are investing in quantum systems to explore drug discovery and clinical research.
• The U.S. Commerce Department unveiled a $2 billion package in May to accelerate quantum technology and deploy a system at a national laboratory.

As artificial intelligence dominates the headlines, quantum computing is gaining steam. Nowhere is that clearer than in public markets, where Quantinuum’s landmark initial public offering and a wave of listings this year signal a shift: Quantum is moving from speculative sci-fi to an early commercial market.

Late last month, Microsoft unveiled a new research center in Maryland, bringing its technology closer to independent evaluators from the government’s Defense Advanced Projects Research Agency. IonQ announced that its latest system would be deployed at Nvidia’s quantum research center, bridging classical hardware with quantum processors. And a technical paper claimed that IBM’s Nighthawk processor took 19 seconds to complete a task estimated to take a supercomputer 110 years.

“A lot of the industry is still doing ‘toy problems,’ ” says Scott Crowder, IBM’s vice president of quantum adoption. “But the people on the leading edge are no longer doing that.”

Nowhere is that leading edge more apparent than in drug discovery, where quantum systems mirror the complex behavior of electrons and molecules. Amgen, one of the world’s largest pharmaceutical companies, has embraced the technology to shorten the drug development timeline. A lead investor in Quantinuum’s first major funding round, Amgen also collaborates with players like QuEra.

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“I look at quantum the same way I look at other emerging technologies,” says Alan Russell, Amgen’s vice president of research and head of R&D technology. “What does it allow us to do that we couldn’t do before, and where can it meaningfully complement the tools we already have?”

For Amgen, that means tackling high-complexity computational challenges, from making sense of vast, intricate data sets to modeling interactions at the molecular level. Amgen, like others, is looking for “quantum advantage,” or the point where quantum systems can complete a useful task more efficiently than the best available classical supercomputers. In theory, quantum advantage doesn’t require fully fault-tolerant systems, which detect and correct errors in real time. This milestone remains elusive, as scaling quantum systems makes them increasingly vulnerable to environmental noise.

Today’s investments are about exploring capabilities and finding practical applications rather than unlocking immediate efficiencies. “For me, the opportunity isn’t necessarily about streamlining operations, but understanding whether it can help us tackle scientific problems that are difficult to solve with today’s tools,” Russell says.

IBM quantum cabling and connectors. (Photo by Amy Lombard)

Enthusiasm is spreading across the healthcare landscape. Five years ago, Cleveland Clinic’s quantum program started out of a cafeteria at its main Ohio campus. Launched during the organization’s centennial to lay a foundation for the next century of care, the initiative centers on the Discovery Accelerator—a partnership with IBM spanning over 60 projects in AI, high-performance computing, and, of course, quantum.

“We had that long-term view, which is what every organization looking at quantum needs to have,” says Dr. Lara Jehi, Cleveland Clinic’s chief research information officer. “Otherwise it will never make sense as an investment.”

Researchers from Cleveland Clinic, IBM, and Japanese research institute Riken were nominated for the prestigious ACM Gordon Bell prize for their work in protein modeling. “The innovation was figuring out how quantum and classical can work together,” Jehi says. “It normalizes it, which in and of itself is a big validation.”

While an early attempt to predict postsurgery cardiac risks proved too complex for current hardware, Jehi sees immense potential in areas such as clinical trial logistics, supply chains, and staff scheduling across sprawling hospital networks.

“When we present quantum purely for drug discovery, we’re limiting it to an application that only interests pharma,” Jehi says. “In reality, it could be applied in any research context across areas we haven’t done a good job of exploring.”

Enthusiasm extends to the federal level, where the Commerce Department unveiled a $2 billion package in May to accelerate quantum technology. Alongside continuing efforts to secure domestic supply chains, Washington is targeting a 2028 deadline to deploy a “scientifically relevant quantum computer” at a national laboratory.

The push partly stems from security concerns. At the center of the debate is Shor’s algorithm, a program capable of factoring large numbers at speeds no classical computer can match. The algorithm has never been used to break real-world encryption, but government partners emphasize that preparation can’t wait, even with the timing and nature of the risk still unclear.

Bad actors will inevitably harness quantum power, particularly as cloud access lowers the barrier to entry. Industry giants like Amazon Web Services and Microsoft have created ecosystems that host third-party hardware, allowing developers to experiment with quantum algorithms.

“The quantum threat to our public infrastructure is very severe, very real, and certainly coming,” JD Dulny, Booz Allen’s quantum lead, tells Barron’s. “We don’t know what the world’s going to look like in the next two to three years. Whenever a change shows up, as you’ve seen with AI, people are going to do amazing things and they’re going to do awful things.”

For investors looking to bet on quantum’s future, pure-play market leader IonQ continues to draw strong interest, with BofA Securities recently initiating coverage of the stock with a Buy rating, citing strategic technical acquisitions such as its recent purchase of chip maker SkyWater Technology.

Government backing highlights other contenders. Infleqtion leads in defense applications like sensors and atomic clocks, while federal stakes in publicly traded players Rigetti Computing, D-Wave Quantum, and Quantinuum validate their respective hardware approaches. IBM remains a central player, though analysts debate how much quantum growth is already priced into the stock.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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