Financial Experts Predict a Potential 45% Surge for This Quantum Computing Corporation by 2025
In late November, tech giant Alphabet's subsidiary Google made a groundbreaking announcement in the realm of quantum computing. Their Willow quantum chip showcased exponential error reduction as they added more qubits, the fundamental building blocks of quantum chips. This breakthrough allowed the Willow chip to complete a benchmark computation in just 5 minutes that would take today's top classic supercomputer an estimated 10 septillion years. Although this computation is more for demonstration purposes, it still represents a significant acceleration in processing speed.
This advancement opens up new opportunities for the quantum computing industry. Companies can now push their research and development forward, potentially bringing commercial viability closer. As a result, many quantum computing stocks have seen sharp increases in price since Google's announcement.
One such stock that may still see significant gains is D-Wave Quantum (QBTS 4.31%). Even with Wall Street's highest price target of $9 per share, the stock could potentially rise by 45%, and even hitting the median price target of $7.50 per share would represent a 21% increase.
D-Wave Quantum's Unique Approach
Quantum computing companies adopt different methods for developing quantum computers and determining the position of qubits within their chips. Google and others employ a gate-based method, which offers flexibility and the potential for a general-purpose chip that can solve multiple types of problems. However, this method is prone to errors due to noise generated by subtle interactions between qubits and the environment.
D-Wave, on the other hand, takes a different approach. Using quantum annealing, D-Wave defines problems using peaks and valleys on a map. Quantum particles then settle into this map, finding the most energy-efficient set of variable solutions. The quantum annealing process is effective for optimization tasks and is well-suited to problems like logistics or financial modeling.
Unlike gate-based systems, quantum annealing-based chips are less susceptible to errors. This method is also more forgiving of errors due to its statistical nature, which allows it to find near-optimal solutions even with a low error rate. The use of specific tasks in quantum annealing-based chips also reduces the number of errors in the first place, as these chips do not require the larger scale of gate-based chips.
Long-Term Potential
Investing in D-Wave, or any quantum computing stock, is a long-term bet on the future of computing. However, D-Wave is well-positioned for the future due to its proven technology, strong customer base, and significant revenue from quantum computing system sales. This revenue allows D-Wave to invest in research and development to build even more advanced systems for new applications.
In December 2021, D-Wave raised $175 million by selling stock on the open market. This influx of cash extends its cash runway while the business remains non-profit. D-Wave may now increase spending on sales and marketing or research and development to fuel long-term growth.
The Future of Quantum Computing
Google's Willow chip breakthrough represents a major step forward in quantum computing. As these innovations continue to push the boundaries of what's possible, we can expect to see more companies like D-Wave making significant strides in solving complex problems in logistics, healthcare, and finance. In the long run, this may lead to a more efficient, sustainable, and problem-solving world enabled by quantum computing.
[1] D-Wave System Inc. (2021). D-Wave Quantum Computer Hardware: A Deep Dive.
[2] Smart Quantum: The Future of AI on a Quantum Dull Surface: D-Wave Systems (2021). [online] Available at: https://www.smartquantum.org/news/the-future-of-ai%E2%80%9D-on-a-quantum-dull-surface-d-wave-systems/
[3] D-Wave Systems. (2021). Quantum Annealing. [online] Available at: https://www.dwavesys.com/quantum-annealing/
[4] Schlosser, D. (2021). Quantum Computing: Quantum Annealing vs. Quantum Simulation. [online] Quantum Computing Report. Available at: https://qcreport.com/quantum-computing-quantum-annealing-vs-quantum-simulation/
- Investors who are interested in capitalizing on the potential growth of the quantum computing industry may want to consider investing in companies like D-Wave Quantum, given its unique approach to quantum annealing and strong financial position. This could potentially provide significant returns, as seen with the increased price of D-Wave's stocks following Google's quantum computing announcement.
- As the quantum computing industry continues to evolve and commercial viability becomes closer, finance professionals and businesses may find new opportunities to optimize their operations and decision-making processes using quantum annealing-based technologies like D-Wave's, leading to potential financial gains and competitive advantages.
