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October 2026 · 7 min read

Investing

Quantum Computing Could Reshape Tech. Here's What It Means for Investors Now.

I believe quantum computing could be huge for tech. I also think many quantum stocks are priced for a future that's still years away.

Hey everyone,

I believe quantum computing could end up being one of the most consequential technologies of the next few decades, with a real impact on the tech industry, from drug discovery and materials to cybersecurity and AI. I also believe that most of the money being thrown at "quantum" stocks right now is pricing in a future that's still years away. Both of those can be true, and this post is about holding them together.

What quantum computing actually is

A normal computer stores information as bits, each a 0 or a 1. A quantum computer uses qubits, which can exist in combinations of 0 and 1 at once and can be linked together in ways classical bits can't. For certain kinds of problems, that lets a quantum machine explore a huge number of possibilities in a way a regular computer can't match, no matter how big it is.

It's important to say what it's not. A quantum computer isn't a faster laptop, and it won't replace the chips in your phone or the GPUs training AI. It's a specialized tool that could be dramatically better at a narrow set of problems.

Why I think it matters

  • Chemistry and materials. Molecules are quantum systems, so simulating them is something quantum computers are naturally suited for. Better batteries, fertilizers, catalysts, and drugs are the dream use cases, and they're worth enormous amounts of money.
  • Optimization. Logistics, scheduling, finance, and energy grids all involve picking the best option out of astronomically many. Even modest speedups could be valuable.
  • Cryptography. A large, error-free quantum computer could break much of the encryption that protects the internet and banking. That's why governments and companies are already moving to "post-quantum" cryptography, and NIST has published new standards for it. For investors, that's a nearer-term business opportunity than the machines themselves.
  • AI. I'd treat the idea that quantum will supercharge AI as speculative for now. But the two fields are increasingly linked, since AI is used to calibrate and correct quantum hardware, and both compete for the same scarce talent and capital.

The reason this is a tech-industry story, and not just a science story, is the same reason AI is: if it works, the advantage compounds. Companies that can simulate a new material or design a new molecule faster than rivals gain a lasting edge.

Where the technology really is

The honest answer is that it's early, but the trend is encouraging. The hard problem has always been errors. Qubits are fragile, and the answer is quantum error correction, which spreads one reliable "logical" qubit across many physical ones. In 2024, Google showed that adding more qubits to its error-correcting code actually reduced errors, a milestone researchers call going "below threshold." Since then, IBM, Google, and Quantinuum have all pointed to roughly 2029 for a useful, fault-tolerant machine. IBM's roadmap targets a system called Starling with about 200 logical qubits by then.

A few caveats. Those dates are company targets, and much of what I found on 2026 milestones comes from secondary sources and company announcements I couldn't independently verify. And useful machines are far bigger than today's demos. Breaking modern encryption, for example, is estimated to need on the order of a million physical qubits, far beyond anything built so far. Progress is real, but there is still a big gap between a lab result and a product.

What it means for investors now

Here's where I'm cautious. The public quantum companies are growing quickly from tiny bases, and the market is paying a premium for the story.

Market cap divided by annualized Q2 revenue

IonQ ~48x Rigetti ~250x D-Wave ~520x Bar for D-Wave is capped to fit; the multiple is roughly 520x
Our rough arithmetic, not a published ratio. Market caps are from a U.S. News table dated Sept. 14, 2026 (IonQ $15.3B, Rigetti $5.1B, D-Wave $6.4B), divided by Q2 2026 revenue multiplied by four (IonQ $80.1M, Rigetti $5.1M, D-Wave $3.08M). IonQ's revenue includes an acquisition. Prices move daily and sources calculate sales multiples differently, so treat these as ballpark figures.

For perspective, a mature, profitable company might trade at a P/E of 20 to 30, as we covered in our P/E post. Here, there's no P/E at all, because all three pure plays remain unprofitable and have relied on repeated share sales to fund themselves, which dilutes existing owners. IonQ is the revenue leader, in part thanks to acquisitions, while Rigetti and D-Wave have very small revenue bases.

A framework for thinking about where quantum exposure sits:

  • Big tech with a quantum program. Companies like IBM, Alphabet, and Microsoft are building quantum hardware, but it's a small part of much larger businesses. You get exposure without the extreme valuations, but also without the full upside.
  • Pure-play quantum companies. These offer the most direct bet and the most risk: tiny revenue, large losses, dilution, and prices that swing wildly.
  • Enablers. Suppliers of components, cooling systems, lasers, and chips, plus companies working on post-quantum security, can benefit regardless of which quantum approach wins.
  • Funds. A diversified technology or quantum-themed fund spreads the risk of picking the wrong company or the wrong technology.

My own rule of thumb is to treat a position like this as a long-term, small bet, size it so that a total loss wouldn't hurt, and avoid chasing it after a big run. We've seen this pattern before. As we noted in our Industrial Revolution post, a technology can be real while the stocks tied to it are still a bubble, as with railways in the 1840s. Even if quantum computing succeeds, there's no guarantee that today's leaders are the winners, or that today's prices leave room for a return.

What I'd watch

  • Logical qubits and error rates. The number of error-corrected qubits, and how reliably they run, matters more than the headline count of physical qubits.
  • Real revenue. Is it from customers solving problems, or from research contracts, acquisitions, and one-off deals?
  • Cash runway and dilution. How much money does the company have, and how often does it sell new shares?
  • Roadmap delivery. Do the companies hit the milestones they announce, on time?

What to take from it

  • The technology is real and improving. Error correction has moved from a research question to an engineering schedule.
  • It's a specialist tool, not a replacement. Its value is in a narrow set of high-value problems.
  • Timing is the risk. A useful machine is probably years away, while valuations reflect the future today.
  • Size your bet to your conviction and your risk. Believing in a technology and owning it at any price are different things.

To learn how to put a price on companies that aren't profitable yet, our free DCF course is a good place to start.

More soon,
Learn to Love Money

NOT FINANCIAL ADVICE. This post is an opinion piece for education only and is not a recommendation to buy or sell any security. Company roadmaps are targets, not guarantees, and financial figures are approximate and change daily. Do your own research or talk to a licensed advisor before investing.

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