Quantum Computing Is the Future—Here’s How to Invest
From science fiction to reality—quantum computing is poised to emerge as the next big thing in tech. Why QTUM Is Your Ticket to the Future
- Quantum computing is advancing rapidly, with recent breakthroughs like Google’s Willow chip showcasing the sector’s potential to revolutionize industries such healthcare and finance.
- The convergence of quantum computing and AI presents enormous growth opportunities, making the quantum niche an attractive choice for investors seeking to capitalize on this next tech revolution.
- The Defiance Quantum ETF (QTUM) offers a diversified investment strategy, providing exposure to top quantum companies—such as D-Wave (QBTS), IonQ (IONQ) and Rigetti (RGTI)—while mitigating the risks of picking individual winners.
Roughly 18 months ago, we highlighted the potential of quantum computing as the next big breakthrough in technology, alongside the rapidly advancing field of artificial intelligence (AI).
And since July of 2023, the quantum computing sector has gone from theoretical discussions to tangible advances, with companies like Alphabet (GOOGL) and Microsoft (MSFT) making notable strides.
As we head into 2025, the once-distant potential of quantum computing is rapidly turning into a near-term reality, as reflected by some eye-popping returns across the sector—D-Wave Quantum (QBTS), IonQ (IONQ) and Rigetti Computing (RGTI) are up 685%, 265% and 918%, respectively, in 2024. Today, we turn our attention to the Defiance Quantum ETF (QTUM)—which includes all three of these high-performing companies among its holdings—and explain why it offers compelling exposure to this dynamic sector.
The importance of quantum technology
In 2024, the quantum computing sector has seen a surge in momentum, with breakthroughs sparking renewed optimism about its future. A catalyst for this excitement was Google’s recent unveiling of its new quantum chip, Willow. Ademonstration showed the chip could complete a task in under five minutes that would take today’s fastest supercomputers an unfathomable 10 septillion years. “This mind-boggling number exceeds known timescales in physics and vastly exceeds the age of the universe,” said Hartmut Neven, the founder of Google Quantum AI and a leading figure in quantum computing.
The chip addresses a longstanding challenge in quantum computing—quantum error correction—by reducing errors exponentially as the number of qubits increases, a milestone Neven described as “cracking a key challenge in quantum error correction that the field has pursued for almost 30 years.” This shows progress toward scaling quantum systems for more reliable and efficient performance.
Yet, even as Google celebrates its achievement, some experts, like Francesco Ricciuti from Runa Capital—who’s worked for years on autonomous robots—caution that the breakthrough, while remarkable, doesn’t yet have practical applications. Speaking to this reality, Ricciuti noted “they are trying to define a really high problem for normal computers that they can solve with quantum computers.” He elaborated that “it is amazing they can do that, but it doesn’t really mean it is useful. We need a ChatGPT moment for quantum.”
Despite these near-term limitations, the excitement surrounding quantum computing continues to grow. As observed by Winfried Hensinger, a quantum technology professor at the University of Sussex, Willow has made encouraging progress in error reduction. “This result increases confidence further that humanity will be able to build practical quantum computers enabling some of the high-impact applications quantum computers are known for.” However, the real breakthrough will come when quantum computers can process at least a million qubits, a milestone that’s still out of reach. That said, recent developments suggest this exciting technology is moving closer and closer to real-world application.
Defiance Quantum: unlocking the power of a diversified ETF
For investors looking to gain exposure to the rapidly advancing quantum computing sector, the Defiance Quantum ETF (QTUM) presents a compelling opportunity. Quantum computing, widely regarded as the next frontier in technology, remains in its early stages, so picking winners can seem daunting. The numerous players have their own approaches to quantum hardware, software and applications. That’s where a diversified ETF like QTUM becomes a compelling choice, offering exposure to a basket of companies leading the charge in quantum computing and related fields.
QTUM tracks the BlueStar Quantum Computing and Machine Learning Index, which includes companies at the forefront of quantum computing, machine learning, cloud computing and other transformative technologies. As of December 2024, the ETF’s top holdings include industry leaders like IonQ (IONQ), Rigetti Computing (RGTI) and D-Wave Quantum (QBTS). These companies have made strides in quantum research and development, with all three seeing their shares soar in 2024, reflecting the growing interest in quantum computing’s potential. By investing in QTUM offers exposure to these high-growth companies while mitigating the risks of picking individual stocks in an immature sector.
The diversified nature of QTUM offers another advantage. With many quantum computing companies jockeying for dominance, it can be difficult to predict which will emerge as the long-term winners. However, ETFs like QTUM actively select and adjust their portfolios, ensuring that it includes not only the industry standouts but also emerging players that could become contenders in the future. The ETF’s active management enables it to stay responsive to developments in the industry, adding stocks as quantum computing evolves. Additionally, QTUM includes MicroStrategy (MSTR)—a heavyweight in the cryptocurrency sector—which might be viewed as another positive.
Listed below are the top holdings of the Defiance Quantum ETF (QTUM) and their percentage of the total portfolio:
- IonQ (IONQ): 5.93%
- Rigetti Computing (RGTI): 4.29%
- D-Wave Quantum (QBTS): 4.19%
- MicroStrategy (MSTR): 3.45%
- Coherent (COHR): 1.84%
- International Business Machines (IBM): 1.74%
- RadNet (RDNT): 1.71%
- NTT DATA Group Corporation (9613.T): 1.69%
- Accenture plc (ACN): 1.64%
- Marvell Technology (MRVL): 1.63%
Much like its constituents, QTUM has been on an upward trajectory this year, rising more than 50% year-to-date and demonstrating strong momentum heading into 2025. Recent trading history highlights the fund’s performance, with notable price increases, such as a 6.5% gain on December 16, 2024, following the unveiling of Google’s breakthrough Willow quantum chip. Momentum and diversification position it as a solid choice for growth investors seeking to capitalize on this emerging sector’s long-term potential.
Positioning for the quantum leap
Quantum computing is moving closer to unlocking its transformative potential. While practical, real-world applications are still a few years away, it will drive innovation. From healthcare to finance, and particularly in the convergence with artificial intelligence, quantum computing promises to address complex challenges that traditional computing has struggled to solve.
For investors, a diversified approach offers an effective way to engage with the quantum computing revolution. Companies like IonQ, Rigetti and D-Wave Quantum are pushing the boundaries of what’s possible, positioning themselves as players in this emerging sector. However, the Defiance Quantum ETF (QTUM) provides a way to tap into this growth by offering exposure to a diversified group of companies at the forefront of quantum computing. And with QTUM, investors can participate in the sector’s expansion without the stress and uncertainty of trying to pick individual winners.
As quantum computing matures, it promises to unlock unprecedented opportunities, from streamlining complex calculations to solving optimization problems previously out of reach. With bullish momentum taking hold, QTUM offers a compelling opportunity for those looking to position themselves for the next great leap in this transformative niche.
Andrew Prochnow has more than 15 years of experience trading the global financial markets, including 10 years as a professional options trader. Andrew is a frequent contributor Luckbox magazine.
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