Quantum computing, an innovation many find difficult to define and understand, might be the next great advancement in modern computing.

As analysts and portfolio managers, we possess an innate curiosity for emerging technologies, recognizing their potential to both create opportunities and disrupt industries within our investment portfolios. The rapid ascent of Generative AI stands as a testament to this transformative power. As we navigate this dynamic landscape, our attention is drawn towards another prospective game-changer encompassing academia, public companies, private companies, and even nation states: Quantum Computing. We are not physicists and we do not claim to be quantum computing experts — our endeavor has been to understand what quantum computing is, its current state of development and its potential significance for the industries and companies we invest in on behalf of our clients.

Over the past three decades, tremendous progress has been made in quantum research and development; in some cases very transparent progress, but in other cases less so. In the scientific and academic communities, as with most technology development, progress in quantum computing is by and large transparent and shared openly to advance the field. With most public companies, where we focus our investment efforts, their progress and even roadmaps are also shared as part of their public disclosures. And disclosed progress has indeed been significant, to the point where some of quantum computing’s leaders are achieving early quantum advantage milestones. Companies in the private sector, however, are by definition less transparent, and certainly most nation states’ development of quantum computing is not transparent at all for obvious national security reasons. The fact that breakthroughs, which may happen behind the scenes, could lead to significant relative economic and or military advantage sooner than expected makes understanding and monitoring quantum computing even more important for investors.

The results of our team’s research have led us to the conclusion that while quantum economic advantage may be years if not decades away, for a select number of applications, quantum computing may achieve relative quantum utility much sooner.