By Mackenzie Tatananni

Quantum-computing researchers generally are cautious about predicting a commercial breakthrough for this emerging technology. CEOs of quantum-related companies, on the other hand, are invariably enthusiastic. Cantor Fitzgerald analyst Troy Jensen says he is somewhere in the middle, although it has taken him a while to move from skeptic to believer.

Jensen is among a small cohort of Wall Street analysts who follow quantum-related "pure plays," as opposed to industry giants such as IBM and Alphabet's Google, which are also developing the technology. Quantum computing aims to harness quantum physics to solve complex problems much faster than classical computers can.

One wrinkle in the race to commercialization is the number of competing quantum methodologies. Superconducting circuits use metals cooled to near absolute zero; trapped ions are suspended in vacuums and manipulated by lasers. Photonics leverages particles of light and relies on highly complex physics. Neutral atoms are another emerging modality touted as a highly scalable approach to quantum. Each approach is backed by different players.

Following a lull in public listings last year, the industry has seen a wave of companies come public in the past few months, mostly through mergers with special-purpose acquisition companies, or SPACs. More are on the way. Jensen covers some of the largest publicly traded companies, rating IonQ, D-Wave Quantum, and Rigetti Computing Buy, and Quantum Computing Hold. He also covers a handful of other specialized technology stocks in industries such as 3-D printing and semiconductors.

Quantum is a long-term play. Share performance has been driven largely by hype and speculation ahead of the achievement of major technological milestones expected by the end of the decade. Jensen spoke with Barron's on May 15 about the likelihood of a coming breakthrough, the outlook for quantum stocks, and his changing perspective on the industry. An edited version of the conversation follows.

   Barron's:   How does quantum computing differ from classical computing? 

Troy Jensen: Classical and quantum computing have more similarities than differences. Both need components such processors, memory, operating software, and application software. The main difference is in the processor. Traditional computing uses central processing units [CPUs] and graphics processing units [GPUs], but quantum computing uses quantum processing units that are powered by quantum bits, or qubits, and follow quantum physics dynamics.

How large could the eventual market for quantum computing be?

Most people in the industry reference estimates from Boston Consulting Group and McKinsey. McKinsey says quantum computing will generate $43 billion to $71 billion in revenue by 2035, while Boston Consulting Group says it will create $450 billion to $850 billion of economic value globally by 2040.

How have your expectations for the quantum industry changed since you started researching the space in 2024 and officially launched coverage last year?

I have been an equity analyst for 28 years. When I was first asked to follow quantum computing companies and saw the stocks' valuations, I was skeptical. I have been trained to value companies based on revenue, profitability, and multiples of Ebitda [earnings before interest, taxes, depreciation, and amortization]. All these valuation metrics are impossible to use, given the lack of significant revenue and the magnitude of the near-term losses.

As I started to dig in, one of the first things obvious to me was the national security risk. If a quantum computer can crack the hardest encryption technologies today, all of our data are at risk. That includes classified and top secret national information and launch codes. All of our banking industries use encryption, our electrical grid would be exposed, cryptocurrencies are based on encryption....

As I started speaking to technical people in the industry, I gained more confidence that quantum is making progress toward the milestones it needs to reach, like the number of qubits and fidelity. Within the next year or two, we will see quantum computers working in conjunction with CPUs and GPUs, with the quantum computer solving the portion of the equation that was previously unsolvable. As of today, high-performance computers have limitations when it comes to solving extremely difficult equations with hundreds or thousands of variables. Complexity is ideal for quantum computers.

The number of publicly traded quantum computing companies has been growing. Is it too early to separate the winners from the losers?

I'm a big believer that there will be multiple winners in this space. It isn't a winner-take-all scenario. There are four primary methodologies used in quantum computing: superconducting, neutral atoms, trapped ions, and photonics. If you bet on which category you think will win and it wins, all the companies in that category will be winners.

For example, If superconducting wins, IBM and Alphabet's Google would be the beneficiaries. If trapped ions are favored, the winners would be IonQ and Quantinuum, the Honeywell International spinout that will come public soon.

If you think photonics has the lead, the leaders in that category are Xanadu Quantum Technologies and PsiQuantum, also still private. But PsiQuantum is getting a lot of attention and building the country's largest quantum computing facility in Chicago. Quantum Computing is a third name, but is behind the others in the development of its photonic quantum capabilities.

In neutral atoms, Infleqtion just went public. Private companies such as Atom Computing and QuEra also get called out as leaders in that methodology.

How do you define a winner?

Commercialization or market-cap appreciation. I'm a stock-focused guy, so I have to recommend investments that I expect to appreciate. The winners could create a lot of wealth, not only for themselves but other industries. There is so much market value that quantum computers can enable in drug discovery, materials science, and logistics, for example.

There are concerns that small quantum start-ups don't stand a chance against industry giants like IBM. Is it anyone's game, regardless of size and resources?

Yes. I'm often asked, "How can a company like Rigetti Computing compete with IBM and Google and survive?" [Rigetti specializes in superconducting.] I would argue that having IBM and Google in the category creates standards and accelerates the space.

There is no lack of capital-raising ability for this industry right now. There will be computing pure plays and component suppliers, and merchant chip suppliers and dilution refrigeration suppliers [makers of cryogenic cooling systems used in superconducting computers].

Which companies, in addition to hardware developers, could benefit if the industry takes off?

IBM is creating a lot of quantum software. Companies such as Horizon Quantum are going to make the compilers [software that translates code from one programming language to another] and operating systems. Xanadu has its own version of software development tools. Then there are dilution-refrigerator suppliers. Bluefors and Maybell Quantum Industries are well-known private companies in this space.

Do you consider quantum stocks highly speculative, or is that perspective changing?

There will be some zeros in this industry, so there is an element of speculation. There will be some companies that can't commercialize their technology and go to market. If that's the case, they will burn through their capital -- and they all have high burn rates right now. There has been a lot of retail buying momentum. Quantum is popular in the press, and some of these stocks make moves when there is no news behind them.

Skeptics say there is no way to justify the stocks' prices in the absence of significant revenue. Some are trading at hundreds of times what little revenue they have. What is your view?

I view these companies like biotechs. If they can commercialize their products, there will be $100 billion market-cap companies in this space, but that's years away. That is why revenue doesn't mean much right now. You can't value these companies based on their revenue. The technical milestones are much more important.

What metrics should prospective quantum investors look for in companies' quarterly reports?

The fidelity, or the accuracy, of a system's quantum state. Five nines [99.999% accuracy] is the success rate needed to build a reliable quantum computer. The number of customers is also important, because that is what gets quantum computers built. That, in turn, leads to more people running them and solving problems.

Are there any other figures to watch?

The most important numbers are the technical numbers. Physical qubit counts have to continue to grow to hundreds of thousands. More importantly, multiple physical qubits are entangled to create a logical qubit count, which is really what people look at.

A logical qubit is a collection of physical qubits [such as a single atom, photon, or superconducting circuit] that work together to create a near-perform qubit. I was under the impression that a logical qubit had perfect fidelity. It doesn't yet. But over time, the belief is that the fidelity of both physical qubits and logical qubits will improve.

China is aiming to make quantum computers "widely available by 2030," a goal outlined in the latest Five-Year Plan. Is that target feasible?

I think 2030 makes sense, but quantum is occurring in two phases. Phase one is as an accelerator working with a high-performance computer. Within two years, quantum computers will be able to assist CPUs and GPUs and start solving some problems that couldn't be solved before.

You are describing hybrid quantum computing, an approach championed by people like Nvidia CEO Jensen Huang. Will quantum computers ever replace classical machines?

All the quantum executives say CPUs and GPUs will always exist. You don't need a high-end quantum computer for basic computing tasks. But if I am sci-fi dreaming, why can't a computer that is much more powerful do everything? Theoretically, that could happen, but it is a very, very long way away.

If hybrid quantum-classical computing is phase one, what is phase two?

Phase two is when you get to 1,000 logical qubits [a milestone that could signal the arrival of fault-tolerant quantum computers, which operate reliably even in the presence of errors]. It's still doubtful if we can get to 100 on some methodologies. But quantum advantage will happen in the next one to two years.

The Chinese government aggressively subsidizes quantum. Should the U.S. government play a role in shaping the domestic quantum industry?

If you go back four to six months, the belief was that the U.S. government was going to take direct equity stakes in quantum companies the same way they were investing in critical mining. I would rather see the government invest in education. We need more quantum physicists coming out of college and entering quantum research labs, developing code, and working on the problems we need to resolve to reach key milestones.

How will quantum integrate with another emergent technology: artificial intelligence?

It goes in two directions. AI hinges on the ability of computers to process as much data as possible. But AI [like IBM's Qiskit Code Assistant] can help quantum companies write code and applications right now. Nvidia just announced Ising, an AI model family that helps with error correction. So, the technologies can facilitate the growth and development of one another.

Quantum also introduces risks, particularly in cybersecurity . Is this a real threat?

Sometime in the next few years, we are going to see quantum computers cracking cryptology. When SHA-256 [the algorithm that acts as the digital fingerprint underlying blockchain networks] is at risk, that's a huge national security risk. That hopefully is five years away, but could happen sooner. They call that Q-Day in the industry.

There has been a push to upgrade systems against future quantum threats. This is called postquantum cryptography. Will these efforts succeed, given how little visibility we have into a threat that is still evolving?

Postquantum cryptography hinges on the belief that modern cybersecurity systems are built with crackable codes. So, all these algorithms would need to be upgraded to crypto-safe algorithms. I'm doubtful. How do we really know how powerful a quantum computer is? It is likely they will be able to crack through most protocols we can develop today.

Any thoughts you would like to leave us with?

I started out a skeptic, but my belief that quantum computing will commercialize has increased meaningfully in the past year and a half. I feel like we are on the cusp.

Thanks, Troy,

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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May 21, 2026 03:00 ET (07:00 GMT)

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