Quantum computing — an early-stage technological sphere — has been hitting headlines for quite some time now, thanks to its ability to accelerate computing power, and immense potential for growth.
A fresh wave of industry breakthroughs, rising corporate spending and notable commercialization momentum have been driving the space. Defiance Quantum ETF QTUM has added about 86% over the past year and about 16% over the past month.
Breakthroughs Fueling Market Excitement
Quantum stocks rallied sharply last week, driven by excitement around NVIDIA’s new open-source AI models aimed at advancing quantum computing, as quoted on CNBC. The chip giant’s push into open-source AI models has acted as a catalyst for the broader ecosystem. These advancements are narrowing the gap between classical and quantum systems—a needed step toward commercialization.
At the same time, governments and corporations are ramping up funding. The United States, China and Europe continue to invest billions into quantum research, while tech leaders race to achieve “quantum advantage.” China led global quantum technology investment with $17.6 billion as of 2024, while U.S. companies dominated investments in quantum computing, per CNBC.
Tech giants like Microsoft, Alphabet, Amazon and IBM are investing heavily, with IBM targeting a fault-tolerant quantum computer by 2029. IonQ also made headlines by linking two remote quantum computers -- a key technical achievement -- and securing a contract with the Defense Advanced Research Projects Agency.
Growth Trajectory of Quantum Computing
In 2024 and 2025, several companies and research groups demonstrated improved quantum error correction, a prerequisite for building reliable machines, as quoted on CNBC. Other milestones include higher qubit counts, enabling more complex problem-solving that improves reliability by reducing noise and errors, the same CNBC article noted.
Practical quantum advantage is expected around 2028-2029, with wider commercial use in the 2030s, Velu Sinha, partner, Bain & Company, told CNBC. “Quantum is one of a small number of technology categories investors view as structurally inevitable ... The addressable market at full maturity is estimated at $100 to $250 billion, Sinha added, as mentioned on the same CNBC source.
Volatility: A Risk
Despite the rally, the sector remains small and highly volatile. Many stocks are still down year to date, reflecting the speculative nature of the space.
ETFs Offer Diversified Exposure
Given the high risk and uncertainty associated with individual quantum stocks, ETFs provide a more balanced way to tap the theme.Funds like the Defiance Quantum ETF (QTUM) and the Global X AI Semiconductor & Quantum ETF CHPX offer diversified exposure across the quantum value chain.
The ETFs hold pure-play quantum firms. Semiconductor companies enabling quantum hardware and Cloud and AI leaders supporting quantum development also get a place in the fund’s kitty. The fund CHPX has added 27.6%, while QTUM has advanced about 14.7% in the year-to-date frame.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
