Quantum: The ‘Next Big Thing’ Explodes

When I first wrote to you about quantum computing in October 2024, I called it the “next big thing.” Many readers agreed that the potential of quantum computing was exciting but felt it could be a decade or more away from commercial viability.

One year later and interest in the space has accelerated, as the government realizes the necessity of being a leader. Quantum computing has attracted government commitments exceeding $10 billion. I expect more money will follow.

On Wednesday the Department of Energy announced it is expanding its Quantum-in-Space Collaboration and adding new partners, including IonQ (IONQ) and Honeywell (HON) (the majority owner of Quantinuum, a leading quantum computing company).

That same day, New York State announced a $300 million investment in a quantum research and innovation center at Stony Brook. And Maryland, which has been working to establish itself as the “Capital of Quantum” announced a new quantum research center in partnership with Microsoft.

Yesterday, Rigetti Computing, Inc. (RGTI), a builder of quantum processors, and Dutch quantum startup QphoX B.V. announced a three-year contract with the Air Force Research Laboratory to develop superconducting quantum networking.

All of that in just one week.

The stock prices of quantum computing companies have exploded. Rigetti has surged 49% in the past month and 2,917% in the past year. D-Wave, which specializes in quantum optimization systems, and Quantum Computing Inc. (QUBT), which is focused on light-based quantum systems, have followed similar paths higher.

Source: StockCharts

Why Quantum Is a Big Deal

Regular computers process information using bits—digital switches that are either on or off. Everything you do on your smartphone or computer happens via this binary system of ones and zeroes.

Quantum computers work differently. They use "quantum bits" or "qubits" that can be on, off, and everything in between—all at the same time. Think of it like a coin that's spinning in the air: until it lands, it's both heads and tails simultaneously.

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When you combine multiple qubits, their computing power grows exponentially. Two regular bits can handle four pieces of information in sequence. Two qubits can process all four possibilities at once. Three qubits handle eight possibilities simultaneously. By the time you reach 300 qubits—which several companies are approaching—you're dealing with more computational possibilities than there are atoms in the universe.

The practical result: problems that would take traditional computers billions of years to solve become manageable in hours or even minutes on quantum systems. This isn't just faster computing—it's a completely different kind.

Real-World Progress

Quantum computing companies generated $650-750 million in revenue during 2024, with projections exceeding $1 billion for 2025. This revenue comes from hardware sales, cloud computing services, and consulting deals.

Major pharmaceutical companies like AstraZeneca are running quantum pilot projects. The ability to simulate complex biological systems could cut drug development timelines in half (or more), potentially saving hundreds of billions in development costs while getting treatments to patients much faster than today.

Major banks like HSBC and JPMorgan are investing in quantum. This makes sense given its potential applications for risk analysis, fraud detection, and portfolio optimization. Early projections show quantum computers with 50 qubits could predict market behaviors that stump traditional computers, with performance expected to improve dramatically at 300 qubits.

For cybersecurity, quantum computing creates both threats and solutions. It’s possible that current “unbreakable” internet encryption could be cracked by quantum computers. This threat is real enough that the US National Institute of Standards and Technology has released "quantum-safe" encryption standards.

But again, quantum may also provide the solution. Quantum encryption can create truly unbreakable communication—where any attempt to intercept a quantum-encrypted message changes the message itself.

Solving Cosmic-Scale Problems

Access to quantum computing could unlock challenges of science fiction proportions. Futurists like Elon Musk are determined to get to Mars and establish a permanent settlement. Quantum computing could be the key to making this happen, potentially during Elon’s lifetime.

Supporting human life on Mars would be wildly complex. First, how do we get there? Then how do we build shelter, shield ourselves against radiation, and manage reliable access to oxygen, water, food, and energy? Quantum computers excel at solving complex problems, and they may help find solutions we never would have considered otherwise.

Quantum computers could help design new materials that make space travel and interplanetary living feasible. Simulations could identify new alloys and compounds built with otherworldly elements, potentially creating materials that are superior to Earth-based alternatives.

Is It a Bubble?

The quantum revolution is underway. Are the quantum stocks overhyped at this point? Perhaps in the short term. But long term, I maintain this is the next big thing, and we are still in the early stages of developing an entirely new, critical tech sector. I for one am extremely excited about the possibilities, both from a physics standpoint and as an investor. 

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Thanks for reading.

Ed D’Agostino
Publisher & COO