To The Moon

Small Qubits, Big Claims

Quantum computing may be the most exciting idea no one can actually use—yet. I’m fascinated by it. The technology promises to obliterate today’s computational limits, solve problems classical systems wouldn’t finish before the Sun dies, and potentially unlock trillions in productivity. The catch? It’s not quite working at scale. That doesn’t stop the market from behaving as though the future’s already arrived.

When logic breaks, opportunity often begins. Welcome to quantum investing

Projections suggest the total addressable market for quantum technologies could reach $170 billion by 2040—a staggering figure when you consider the companies chasing it are currently generating pocket-change revenue.  I believe this gap between promise and proof is where real opportunity lives—for those willing to wait, risk a little ego bruising, and read more lab notes than earnings calls.

A Sector Trading on Imagination

Investors love a good story, and quantum computing is the ultimate speculative fiction. IonQ, D-Wave, and Rigetti Computing—the three best-known pure plays—are generating headlines, not profits. IonQ pulled in $47 million through Q1 2024, aiming to nearly double that next year. Not bad, but when you’re trading at more than 100x forward sales, 'not bad' doesn’t cut it.

Rigetti has just $1.5 million in quarterly revenue, but its 1,135% annual share price rally says otherwise. D-Wave’s 1,186% pop suggests investors believe it’s cracked optimisation problems for good. All three companies are still navigating the 'noisy intermediate-scale quantum' (NISQ) era—code for machines that sound impressive until you try running something practical on them.

An insight many miss: these firms often build bespoke hardware for specific algorithm classes. They’re not general-purpose computing replacements. Not yet.

Tech Giants Are Playing a Longer Game

If the startups are sprinting, the incumbents are hiking steadily uphill—with bigger backpacks. $Microsoft(MSFT)$, $Alphabet(GOOGL)$, and $IBM(IBM)$ aren’t looking for headlines. They’re embedding quantum research inside AI and cloud divisions, quietly shaping infrastructure for a hybrid future.

And here’s something investors might not realise: Microsoft’s Azure Quantum doesn’t just offer access to its own hardware—it’s already hosting $IONQ Inc.(IONQ)$ and $Rigetti Computing(RGTI)$ on its platform. In other words, the giants are selling picks and shovels while watching the miners dig.

This raises a strategic question I often ask myself: is it better to own the wild-eyed innovator or the landlord collecting rent from all sides?

Valuations Built on Vibes

Let’s be honest—if these quantum pure plays were ice cream, their flavours would be 'Burn Rate Ripple' and 'Vaporware Vanilla.' But I don’t say that to dismiss them. The science is real. The technical teams are formidable. And the returns—if the science scales—could be extraordinary.

Still, revenue-light companies with four-digit share gains aren’t value traps; they’re value hallucinations. Rigetti, for example, has a market cap north of $1 billion despite quarterly revenue of just $1.5 million—meaning investors are currently paying over $650,000 for every dollar of sales. That’s a pyramid that would make even AI stocks blush.

If you’re wondering whether the hype has outpaced the hardware, this chart delivers a rather emphatic yes.

Quantum stocks soar, reality stays grounded—investor gravity not included

And it’s not just top-line distortion. Rigetti’s quarterly burn rate hovers around $18 million, with no near-term profitability in sight. That’s either a bet on a breakthrough—or a countdown to another capital raise.

That’s not necessarily a dealbreaker, but it means I size positions with care. I want exposure to the upside, but I’m not betting the pension pot on it.

And no, I’m not convinced the recent run-ups are sustainable in the short term. They feel like a prelude to a volatility symphony. Beautiful, chaotic, and slightly nauseating.

My Portfolio Strategy: Patience with a Parachute

In my own investing, I treat quantum as a venture-style allocation within a public markets wrapper. I’ve taken small positions in IonQ and Rigetti—moonshot bets. But the bulk of my exposure lies with the majors. Microsoft’s cash flow can carry a thousand science experiments. Alphabet’s quantum AI ambitions are arguably more exciting than its ad business. That’s where I find peace between conviction and capital preservation.

One thing I’ve learned: it’s easier to sleep at night when your experimental trades don’t give your portfolio arrhythmia.

One qubit away from chaos—or the next computing revolution

Optimism, With a Stopwatch

Quantum computing is coming. Maybe not this year, or next—but I believe it’s closer than most think. And when it lands, it won’t arrive gently. The applications could reshape drug discovery, logistics, encryption, even climate modelling. It will be messy, misunderstood, and most likely monopolised by whoever figures out error correction first.

So yes, I’m investing. Not recklessly. Not religiously. But with cautious optimism and a long view. Because when the maths finally works—and the bits stop misbehaving—it might just be one of the most valuable technologies ever built.

And I’d quite like to be holding a few qubits when that moment arrives.

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