Quantum computing making big leap, analysts say

If you’re waiting for an “ah-ha” moment, sorry, pal, not today.Nevertheless, there are some exciting things cooking up in quantum computing, which can solve complex problems exponentially faster than classical computing.In September, Bain & Co. published a report stating that quantum could unlock as much as $250 billion in market value across industries like pharmaceuticals, finance, logistics, and materials science. But it’s going to take time.“Quantum computing faces steep technological hurdles before it can reach full potential, many having to do with the need to convert or hold information in the fragile quantum state,” the consulting firm said. “While quantum computing hardware garners most of the headlines, for many use cases, practical application will require major advances in quantum algorithms (QA)," Bain added.“Research is ongoing and major progress has been made in optimizing existing quantum algorithms, but the pace of new QA development has slowed.”Although some are expecting a single “quantum breakthrough,” Bain analysts said they anticipate more of a gradual curve with “early wins in narrow domains within five to ten years with broader adoption unfolding over time.” Wedbush analysts initiated coverage of IonQ, which develops quantum computing hardware and software.IonQ IBM: Quantum computing will come in waves“While the full potential is immense, the pace of progress and extent of realization are uncertain, and many advances will need to be made beyond qubit scaling,” the firm said, referring to the fundamental unit of quantum information. “To reach full market potential, a fully capable, fault tolerant computer at scale will be needed—and that’s still years away.”More on tech & stocks:Investors hope good news from Nvidia gives the rally more lifePalantir CEO Karp just settled major debateSpotify just solved a major problem for listenersAmazon lawsuit could be a warning to other employersComputer giant IBM (IBM) cited research indicating that quantum advantage—the moment when quantum computing surpasses classical computing in computational efficiency—is likely to emerge by the end of 2026.“Quantum advantage won’t arrive as a single ‘a-ha’ moment,” Big Blue said. “It’ll come in waves, rippling across different industries and use cases, moving the technology forward until it achieves real business value.”IBM said quantum computing now captures 11% of R&D budgets on average—up from 7% in 2023—but commitment varies significantly by sector, suggesting uneven recognition of quantum's strategic impact.Across the board, IBM said organizations are dealing with inadequate quantum skills, immature technology, unclear use case timelines, and expensive hardware. The quantum-ready ones have moved beyond acknowledging barriers to fundamentally dismantling them, the report said. “Quantum computing is on the cusp of advantage—the pivotal point at which quantum computers can run a computation more accurately, cheaply, or efficiently than any classical method,” IBM said.On the technical side, qubits are quite error-prone and require large cooling systems capable of creating temperatures lower than those found in outer space. And while qubit processors used in quantum computing have the potential to massively outperform bit-based processors, current quantum processors can support only a small number of potential qubits.Firm warns of quantum arms race“Decoherence, the process in which qubits fail to function properly and produce inaccurate results, is a major hurdle for any quantum system,” IBM said. “For the foreseeable future, quantum computing will work in tandem with modern and future classical supercomputing to be useful.” Wedbush analysts are convinced that quantum computing is no longer the stuff of science fiction; it’s science.Related: AI growth strains electrical grid as tech companies expand operations“Quantum computing remains in its nascent stages, but we view it as a transformational technology with significant long-term potential which we believe will ultimately represent the next frontier of computing,” the firm said in a Dec. 17 research note. “We expect that by the end of the decade, quantum computing companies will represent a larger share of the total spend on compute from what is a very small base today.”The firm sees quantum computing as a seminal technology that will gain wider adoption over the next few years and become ubiquitous in the 2030s. Much like other previous transformative technologies that created significant shareholder value as they declined in cost and processing power, Wedbush expects the broader quantum computing ecosystem “to also create significant shareholder value as the technology becomes more widely adopted and costs decline over the long term.” Wedbush initiated coverage of four quantum computing companies, three of which—IonQ (IONQ), Rigetti Computing (RGTI), and D-Wave Quantum (QBTS)—all received outperform ratings.Quantum Computing (QUBT), which recently agreed to acquire bankrupt Luminar’s semiconductor business unit in an all-cash transaction, was given a neutral rating.“We project quantum computing spend on the four covered companies could reach just under 2% of total compute expenditures by 2030, from virtually nothing today, as the technology moves from research to commercial applications,” the firm said.Wedbush also warned of a potential US vs. China "quantum arms race" and said it sees the “US administration as being even more vested in ensuring technical leadership vis-à-vis China given the potential national security threat China leadership could pose to US and Western interests.”Related: Analysts see M&A momentum building in 2026