Quantum Computing
The compute layer racing toward fault tolerance — where below-threshold error correction and the first verifiable quantum advantage have shifted the question from 'if' to 'when,' across four competing qubit modalities.
The story
Quantum computing crossed two genuine technical thresholds in 2024-2025: Google's Willow chip demonstrated below-threshold error correction (errors fall as qubits scale) and the first verifiable quantum advantage, while leading vendors crossed 1,000 physical qubits and began a logical-qubit race. Capital followed the science, with 2025 quantum-technology startup investment surging more than sixfold to a record ~$12.6B as the funding mix shifted from government to capital markets. The sector remains in the NISQ era — useful commercial workloads at scale are still a late-decade story — so the thesis is a multi-year roadmap bet on error-correction scaling rather than near-term revenue.
The outlook to 2030
Through 2026-2030 the field moves from physical-qubit counts to logical (error-corrected) qubits, with IBM targeting a fault-tolerant Starling system by 2029 (200 logical qubits, 100M gate operations) and Quantinuum, IonQ and neutral-atom players converging on 99.99% gate fidelity and dozens of logical qubits. McKinsey models quantum technology as a commercial tipping point: quantum-computing revenue rising from >$1B in 2025 toward ~$4.4B in 2028, with broader economic value of $1.3T-$2.7T by 2035. No single modality is expected to win outright; different architectures are likely to excel at different workloads in chemistry, materials, optimization and cryptanalysis.
What is moving the capital
The forces routing money into this theme right now.
Below-threshold error correction (Google Willow)
In December 2024 Google's 105-qubit Willow chip became the first to demonstrate below-threshold error correction, where adding qubits reduces overall error rates — a historic prerequisite for scalable, fault-tolerant machines.
First verifiable quantum advantage
On 22 October 2025 Google Quantum AI reported the first verifiable quantum advantage on Willow using its Quantum Echoes algorithm, running ~13,000x faster than a classical supercomputer with results repeatable on other quantum hardware.
Record investment surge
McKinsey's 2026 Monitor recorded 2025 quantum-technology startup investment surging ~6.3x to a record ~$12.6B, with capital markets (e.g. IPOs) supplying ~44% as the public-funding share collapsed to ~3%.
Roadmap to fault tolerance
IBM's June 2025 roadmap lays out a path to a large-scale fault-tolerant machine (Starling) by 2029 using qLDPC codes that cut physical-qubit overhead by up to ~90%, with Quantinuum's Helios (48 logical qubits, Nov 2025) advancing trapped-ion logical scaling in parallel.
The leaders
Structural large-cap anchors — lower-variance exposure to the theme.
IBM is positioned as a structural, lower-variance play in quantum computing, leveraging its hardware roadmap and financial strength to navigate the long development cycle toward fault tolerance; IBM's diversified business provides downside protection as the quantum industry matures.
Why the excitement: IBM's Q1 FY2026 earnings call highlighted strong overall performance, including 6% revenue growth and 13% free cash flow growth, demonstrating the financial capacity to fund long-term quantum development.
The honest risk: Quantum computing's long development timeline and the uncertainty of achieving fault tolerance pose risks to IBM's investment and the realization of commercial quantum workloads.
Google Quantum AI's verifiable quantum advantage and error-correction progress position Alphabet as a frontier research leader, offering investors exposure to quantum upside within a profitable and structurally sound franchise. Alphabet's Q1 FY2026 earnings call highlighted the company's broader AI strength, providing a robust foundation for continued investment in quantum computing.
Why the excitement: Google Quantum AI reported the first verifiable quantum advantage via the Quantum Echoes algorithm, ~13,000x faster than a classical supercomputer, signaling tangible progress.
The honest risk: Quantum computing remains a nascent field, and commercial applications may take longer to materialize than anticipated, impacting near-term returns on investment.
Honeywell offers a lower-volatility route to quantum-computing exposure via its stake in Quantinuum, a leader in trapped-ion technology; Honeywell's diversified industrial base provides downside protection as the quantum landscape evolves.
Why the excitement: Honeywell's Q1 FY2026 earnings call highlighted strong backlog growth to over $38 billion, indicating robust financial health to support its quantum ventures.
The honest risk: Quantum-computing revenue is still nascent, and Quantinuum's progress depends on continued technological advancements and market adoption.
Asymmetric plays
Smaller names with higher upside and deeper potential drawdowns.
IonQ is the clearest small-cap bet on quantum computing, leveraging its trapped-ion modality and commercial system deployments. The company's focus on manufacturable scaling positions it to potentially unlock utility-scale quantum computing.
Why the excitement: IonQ's Q1 FY2026 GAAP revenue of $64.7 million, more than 8x the same period last year, validates the demand for its quantum computers and the commercial impact of its platform.
The honest risk: Despite technological progress, IonQ's operating margin of -443.3% highlights the significant investments required and the uncertainty of achieving profitability in the near term.
Asymmetry: Large upside if trapped-ion scales commercially; deep drawdown given pre-profit, valuation and timeline risk.
Rigetti Computing is a higher-risk frontier name in quantum, targeting quantum advantage in ~3 years via chiplet-based architecture and high-speed superconducting qubits. Growing adoption of Rigetti systems across government, academic and commercial customers supports meaningful year-over-year revenue growth.
Why the excitement: Management cites growing adoption of Rigetti systems, including new on-premises Novera QPU sales, supporting meaningful year-over-year revenue growth.
The honest risk: Rigetti's negative gross margin of -19.8% underscores the challenges of scaling a frontier technology.
Asymmetry: High upside on technical milestones; sharp drawdown on slow progress or financing needs.
D-Wave Quantum is a quantum-annealing specialist targeting near-term commercial applications. The company's focus on annealing offers a different approach to quantum computing, potentially unlocking value in optimization problems.
Why the excitement: D-Wave's Q1 FY2026 bookings surged nearly 2,000% year-over-year, signaling strong commercial momentum.
The honest risk: D-Wave's operating margin of -1155.6% highlights the significant challenges in achieving profitability.
Asymmetry: Upside on commercial adoption; deep drawdown given narrow approach and cash needs.
Inside the theme
The sub-layers and the leaders that anchor each one.
Frequently asked questions
Is quantum computing investable yet?
It is early and high-risk. Hardware has moved from lab to roadmap, but useful, fault-tolerant machines are still ahead, so this is a frontier theme sized for asymmetric, smaller positions.
Large platforms or pure-plays?
Large platforms like IBM and Alphabet can fund the long road and offer diversified exposure; pure-plays like IonQ and Rigetti carry concentrated upside if their approach wins and concentrated risk if it does not.
What is the key milestone to watch?
Error correction — making qubits reliable enough for real workloads — is the gating milestone. Whoever clears it convincingly first is likely to re-price the field.
How does the MoonshotScore evaluate this theme?
It weights revenue traction, cash runway and R&D intensity — flagging that most pure-plays are pre-profit with long timelines and real financing risk.
What is the main risk?
Timelines can slip for years, most pure-plays burn cash and may need to raise capital, and a rival physics approach winning can strand a company's roadmap.
Research sources
- McKinsey & Company — The Year of Quantum: From concept to reality in 2025 (Quantum Technology Monitor 2025)
- McKinsey & Company — McKinsey Quantum Technology Monitor 2026: A commercial tipping point
- Google (The Keyword blog) — Meet Willow, our state-of-the-art quantum chip
- The Quantum Insider — Google Quantum AI: New Quantum Chip Outperforms Classical Computers and Breaks Error Correction Threshold
- HPCwire — Google Claims Quantum Advantage with Willow Chip (Quantum Echoes algorithm)
- IBM Newsroom — IBM Sets the Course to Build World's First Large-Scale, Fault-Tolerant Quantum Computer
- IBM Quantum Computing Blog — IBM lays out clear path to fault-tolerant quantum computing
- IonQ / SEC — IonQ Q3 2025 Results (Form 8-K) — revenue guidance, $2B offering, technical milestones
Related themes
AI InfrastructureBiotech & AI Drug DiscoveryDefense Tech 2.0
Educational content, not investment advice. Past performance does not guarantee future results.