How to invest in quantum computing

It is first necessary to distinguish a supercomputer from a quantum computer. While the goals are the same, the main difference is how they address and resolve problems.

A classic computer is powered by one or more processors at its heart, and the speed with which it processes and analyzes data depends on the power of these processors. Thus, a supercomputer, such as those from IBM or Atos, uses traditional processors (GPU) to carry out a very large number of calculations simultaneously. It is particularly effective in solving so-called “problems”.deterministic” in parallel, such as weather simulation, fluid dynamics or the analysis of large databases. These machines are optimized to maximize the speed and number of calculations per second (measured in FLOPS).

To increase this power, increasingly tiny components are used, reaching dimensions below a nanometer, where the rules of quantum physics take over from those of classical physics. This is where quantum computing comes in. Unlike classical computers which store information in the form of 0s or 1s (bits), a quantum computer can record and process these two states simultaneously (Qubits) thanks to a phenomenon called superposition, which dramatically multiplies its computing power.

Source : CBInsight

As the technology is still in the R&D stage, there is no single way to make a quantum computer. Today, six methods of Qubits are used at different stages of maturity:

• Superconducting qubits : they operate at temperatures close to absolute zero, allowing precise control of quantum states. Although this technology is among the most advanced, it requires significant cooling systems.
• Ionic qubits : these qubits use ions in a vacuum controlled by laser. However, they are slower than superconducting qubits and scaling them up poses problems.
• Photon qubits : they exploit elementary particles of light to carry out quantum operations, by manipulating them via optical devices. However, the interaction between photonic qubits remains a challenge for large-scale calculations to avoid errors.
• Qubits with neutral atoms : Individual uncharged atoms, with equal numbers of electrons and protons, can store information in different energy levels. These atoms can be arranged in very dense matrices, which facilitates their use for large systems, but interaction problems are still present.
• Nuclear or electronic spin qubits : this method is based on the spin of electrons or atomic nuclei, manipulated by magnetic fields. Mainly explored in academic research, they provide prolonged consistency, favorable for computational stability, but their precise control and scaling pose technical challenges.
• Topological qubits : still at the theoretical stage, this method is still poorly documented but remains used by Microsoft.

So, let’s take a quick tour of the listed companies positioned in the supercomputers and quantum computers segment.

Pure-Players in the quantum domain

• IonQ focuses on trapped ion quantum computing, with systems available through major cloud providers. It is the only company whose quantum systems are available on the clouds of Amazon Braket, Microsoft Azure and Google Cloud. It was the first pure-play company in QC.
• Discards Computing develops superconducting quantum processors and recently created a modular qubit architecture. The company is also developing a cloud platform called Forest that allows programmers to write quantum algorithms.
• Quantum Computing specializes in room-temperature quantum systems and marketable applications in logistics, bioinformatics, life and physical sciences, quantitative finance, and electronic design automation.
• D-Wave Quantum is a pioneer of “quantum girdling” (entanglement) technology and provides quantum cloud system to its customers.

Tech Giants with quantum programs

• IBM is a historic giant in supercomputing. The company is leading in the field of quantum computing (QC). They launched theIBM Q Experienceenabling more than 100 customers to access quantum resources via the cloud. Their 127-qubit Eagle quantum processor is a leading QC option used by leading companies such as Goldman Sachs and Boeing. The company is betting a lot on this segment.
• Google (Alphabet) has made headlines in the quantum field in recent years, particularly after the publication of his groundbreaking paper in Nature, claiming that his Sycamore quantum processor was the first to achieve “quantum supremacy.” However, like the other large companies mentioned, Alphabet is a highly diversified conglomerate, meaning that the contribution of quantum computing to Alphabet’s overall valuation is likely modest.
• Microsoftwhich focuses on topological qubits and offers quantum services through Azure Quantum, is actively developing quantum software, including the Q# SDK (pronounced “Q sharp”). They also invest in PsiQuantum through their venture capital arm M12. However, the absence of mention of quantum in their annual financial report highlights a potentially limited impact on their stock market value in the short term.
• Intel is a serious candidate for significant involvement in quantum computing. In 2019, Intel announced Horse Ridge, the Tunnel Falls quantum chip and hopes to use it to become a major player in the QC field.
• Nvidia and its GPUs are now also used for deep learning in AI. The giant plays a key role in advanced computing and is moving into QC with cuQuantum. Although quantum is still a minor area for Nvidia, their expertise could drive future success in this sector, making a long-term investment position attractive.
• Amazonlike Microsoft, offers a cloud-based quantum platform within AWS called Braket. This platform provides access to systems from D-Wave, Rigetti and IonQ. However, Amazon is a large company with many interests, and the term “quantum” is not often highlighted in its presentation materials.
• RTX Technologies collaborates with IBM on quantum research for aerospace, defense and intelligence applications.
• Tencent is the largest Chinese company still involved in quantum computer research. Indeed, the Chinese tech giants Alibaba et Baiduwithdrew from the race for quantum computing after closing their research units at the start of the year without giving precise explanations.

Industrial Companies

• Honeywell : the company has outsourced its Honeywell Quantum Solutions (HQS) division by forming Quantinuum, with the announced intention of taking it public. While waiting for the split, investing directly in Honeywell provides access to the quantum computing sector. Even after Quantinuum goes public, Honeywell is expected to retain a significant stake.

Supercalculateurs

Most of the listed companies in the quantum computer segment also own supercomputers. However, they are not the same ones who stand out in terms of performance and innovation. We will rely here on the Top 500 classifying the performance of supercomputers for information purposes.

• Hewlett Packard Enterprise is the current market leader. With its Frontier computer, HPE has had the most powerful supercomputer since 2022 ahead of Intel (2nd), Microsoft (3rd), IBM (9th) and Nvidia (10th). The company also has four supercomputers in the top 10 in the annual ranking which lists the 500 most powerful supercomputers.
• Fujitsuthe Japanese multinational conglomerate, has a long history in the supercomputer business. With its Fugaku computer, the group has the fourth most powerful computer in the top 500. The company’s supercomputers are used in a wide range of fields, such as industrial simulation, weather forecasting and scientific research.
• LenovoChina’s leading PC manufacturer, has increased its market share in the field of supercomputers.
• AMDthe microprocessor maker competing with Nvidia, has become a major force in the supercomputer market. Supercomputing systems have become dependent on AMD’s EPYC processors and Radeon Instinct accelerators due to their competitive performance and power efficiency.
• Atosunder the name Eviden (cloud computing, big data and security part of the group), is one of the only European manufacturers of supercomputers. Its Leonardo (7th) and MareNostrum (8th) computers are the most powerful in Europe and result from the acquisition of Bull in 2014. Rumors of a split between Eviden and Atos are now being mentioned.
• Orange, as part of its partnership with HP, will be in charge of the software part while its partner will provide the hardware. This will make it possible to maintain national independence, with computers being used in crucial areas such as defense or nuclear power. This decision may not be final. The options will be re-evaluated when changing computers (usually every two years).

However, it is possible to cite pure player such as ParTeca young German company, and Canaan an American small cap, dedicated to the development and supply of supercomputers and quantum computers to assist their customers in training AI models.

Only one US ETF has indirect exposure to supercomputers and quantum computers:

• Defiance Quantum ETF: this tracker seeks to track the performance of the index BlueStar Quantum Computing and Machine Learning which replicates the performance of the largest and most liquid companies in the global quantum computing and machine learning sectors. These top five positions are IonQ (5.16%), MicroStrategy (3.30%), D-Wave Quantum (2.48%), Rigetti Computing (2.16%), Coherent Corp (1.90%). With $297 million in assets under management, fees are 0.40% and year-to-date performance exceeds 18%.