Should You Consider Investing in the Quantum Computing Sector? This Investment Adviser Has Some Suggestions

Investors interested in quantum computing could consider ETFs focused on cloud services enabling small businesses to use big technology. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Quantum computers (QC) work differently than regular (classical) computers. They operate on a quantum mechanical theory level and make calculations and simulations that could take computers and supercomputers thousands of years to solve.Large companies such as Amazon and Google use quantum computing to handle large data and develop new technology systems. QCs are in the early stages of being cost-efficient, and their support systems are in the early stages of service and development.Investors may be wondering if the sector has growth ahead of it. The MIT Management Sloan School thinks so, stating: "Quantum Computing, an innovation most can't define and still don't properly understand, might be the next obscure technology to have a seismic effect on business."Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail.Investors should understand the space to see if they want to invest in or increase their exposure to it. The industry's potential numbers are big.The Quantum Insider wrote that the QC market could increase the global economy by more than $1 trillion between 2025 and 2035. It also estimated that vendors should "capture $50 billion of revenue over this period."According to Alex Challans, Quantum Insider CEO, QC will unlock value and activity across many trillion-dollar industries. He stated: "We expect this to drive material economic growth and job creation in regions which lean into supporting the technology."One potential investment opportunity for investors curious about QC is quantum cloud computing, which is expected to unlock potential in medicine, science, business and other parts of the economy.About Adviser IntelThe author of this article is a participant in Kiplinger's Adviser Intel program, a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.It isn't cost-effective for small businesses to buy and service QCs, but quantum cloud computing allows them to remotely access and use QC power in the cloud — paying servicers to run algorithms and carry out simulations on cloud-based quantum processors using the servicer's platforms.QC servicers including BlueQubit, IBM, Google, Microsoft and Amazon are developing innovations that could drastically improve this kind of computing and servicing.Investors can pick out the stocks that they like by researching company data such as annual reports and income statements and gathering other information. Or they can choose a basket of stocks in wrappers such as ETFs or index funds.There are many smaller companies in this sector, and smaller companies could have explosive growth. Investing through portfolios such as ETFs makes sense; portfolios of big and small companies could turn out to be a lower-risk way to get exposure.Also, the index providers have done much of the necessary research in security selection.The following is a list of ETFs that are invested in cloud and tech companies. The sector is often volatile, and fundamental analysis should be used to lower risk and increase appreciation potential.The WisdomTree Cloud Computing Fund (WCLD) tracks the BVP Nasdaq Emerging Cloud Index. It holds about 40% large-cap stocks, 50% mid-cap stocks and 10% small-cap stocks.WisdomTree states that "for investors seeking to generate excess returns, this creates a challenging mix of slower-growing mature businesses with faster-growing emerging ones."WisdomTree also states that cloud computing is already present in our everyday lives, changing how we share information digitally, and explains cloud computing in the following way: "The cloud refers to the aggregation of information online that can be accessed from anywhere, on any device."The Global X Cloud Computing ETF (CLOU) "seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service (SaaS)."Morningstar ranks the stocks held by CLOU as mid-cap. CLOU holds a Zacks 2 (Buy) ranking, based on factors such as asset class return, expense ratio and momentum. CLOU gives investors exposure to the Technology AI segment of the market.Ark Investment Management created and manages the ARK Next Generation Internet ETF (ARKW). Ark believes that innovation is a real life and business changer, and it is determined to invest in companies that are disruptors.Ark states: "Companies within ARKW are focused on and expected to benefit from shifting the bases of technology infrastructure to the cloud, enabling mobile, new and local services, such as companies that rely on or benefit from the increased use of shared technology, infrastructure and services," along with other cloud and networking services.The First Trust Cloud Computing ETF (SKYY) states that cloud technology is one that "uses the internet and central remote servers to maintain data and applications, (and) this type of computing allows businesses and consumers to use applications without installation and provides access to personal files on any device with internet access."First Trust states that corporations use cloud computing because it helps them run efficiently, service customers effectively and bring better numbers to corporate bottom lines.SKYY attempts to invest in companies that deliver cloud-computing services — its infrastructure, its platforms and its applications. SKYY holds mid-cap stocks, according to Yahoo! Finance.Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel, our free, twice-weekly newsletter.In its "Forecasting the Cloud" publications, First Trust printed the following facts and predictions:Further growth for both the cloud and QC appears substantial, and this is without bringing AI into the equation. AI could exponentially increase these growth outlooks.But the industry can be volatile, both in the stock market prices and in actual earnings and revenue reports. Investors should exercise caution when considering predicted future company earnings and stock price outlooks.This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Max Isaacman is a writer and investment adviser in San Francisco. He wrote the groundbreaking first ETF book, How to be an Index Investor (2000); the first Nasdaq Market book, The Nasdaq Investor (2001); and the factor-based book Investing with Intelligent ETFs (2008), all published by McGraw-Hill. He wrote Winning with ETF Strategies (Financial Times Press/Shanghai University of Finance and Economics Press, 2013). He was a columnist for the award-winning San Francisco Examiner, wrote for Delta Airlines SKY magazine, Financial Technology News, American Association of Independent Investors Journal, the Emmy Award-winning website Minyanville.com and other print and digital publishers. He writes for Worth magazine. The tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average. Take this simple quiz to discover whether the 4% Rule will work for you in retirement.

State Tax The Oregon kicker for 2025 state income taxes is coming. Here's how to calculate your credit and the eligibility rules. The tech-heavy Nasdaq also shone in Tuesday's session, while UnitedHealth dragged on the blue-chip Dow Jones Industrial Average. Take this simple quiz to discover whether the 4% Rule will work for you in retirement. It's fair to ask about the latest tech boom, "Is it really different this time?" Gen Xers and Millennials would like to know if they're going to inherit (and how much), but Baby Boomers in general don't like to talk about money. What to do? Poor investment returns early in retirement on top of withdrawals can quickly drain your savings. The ideal plan helps prevent having to sell assets at a loss. The article about lawyers billing clients for hours of work that AI did in seconds generated quite a response. One law firm even called a staff meeting. The S&P 500 is within 50 points of crossing 7,000 for the first time, and Papa Dow is lurking just below its own new all-time high. A little oversight or automation can keep money in your pocket.