In March 2025, for the first time in history, a quantum computer beat a classical computer on a real-world task — not a problem designed in advance for it to win. The margin was small — 12 percent faster on a medical device simulation. But the victory wasn’t important because of its size. It was important because it happened at all. The Wright Brothers didn’t fly to the moon on that first day. They flew 36 meters. Physics didn’t ask how far.
Let’s pause for a moment to understand — what is a quantum computer, exactly?
Imagine you need to find the shortest route between a hundred cities. A regular computer will check one route, then another, then another — one after the next, until it gets to an answer. It’s very fast, but it still works in sequence. A quantum computer checks all the possible routes simultaneously. All of them, in parallel, in one instant.
How is that possible? Because instead of a classical computer working with switches that are either on or off — ones and zeros — a quantum computer works with units that can be both at the same time. Like a coin spinning in the air: before it lands, it’s neither heads nor tails. It’s both. Only when you look at it does it decide. In this kind of physics, computing power doesn’t grow by addition — it grows by multiplication. Every computing unit you add multiplies what’s already there, rather than simply adding to it.
Why hasn’t this reached us until now?
Because the hardest thing is to keep that “spinning in the air” state — the condition in which the computer hasn’t chosen yet. Every small vibration, every bit of heat, every external interference — forces it to choose too early, and in doing so it loses its power. The developers called this “noise,” and twenty years of research focused on one question: how do you protect the computer from the noise around it? In the past two years, the solutions have started to work.
Three applications for the near future, once this becomes commercial:
The first is drug development. Every drug is essentially a molecule that needs to enter the body and do one specific thing without disrupting ten others. Designing such a molecule requires a precise understanding of chemistry — exactly the kind of computation a quantum computer excels at. A drug that takes ten years to develop today — with quantum computing, some of those years (or all of them) could be saved. The person who cures a particular cancer won’t necessarily be the smartest doctor. They’ll be whoever had the right computer.
The second is any problem with a huge number of options where you need to find the best one. Managing a global supply chain, building an investment portfolio that balances hundreds of variables, scheduling thousands of deliveries — all of these are problems a quantum computer solves in a fraction of the time a regular computer takes. We’re not talking about improvements of a few percent. We’re talking about improvements of orders of magnitude.
The third — and the biggest in the long run — is the combination with artificial intelligence. The AI everyone is talking about today runs on chips that consume electricity in quantities we’ve mentioned here more than once. Quantum computing, when it connects with AI, will allow models to process problems that are currently impossible in any reasonable timeframe. The combination of the computational power of the quantum architecture, together with the infinite data accessible to artificial intelligence, is going to change the entire order of things. Nothing less. In my view, if we traveled fifty years forward in time, we wouldn’t recognize the world we’d arrived in. (Maybe I’m exaggerating — but you understand what I mean.)
Back to reality. People have money and want to invest it, not just sound more interesting at dinner parties. Two ways to be part of this story:
The first way — pure-play stocks, meaning companies whose entire business is quantum computing. Here’s where it gets interesting: each of these companies is working on a completely different technological approach from the others. Take IonQ and Quantinuum, which are building on “ion traps” — capturing individual atoms in an electric field and working on them. Other companies, like Rigetti and D-Wave, are working on entirely different approaches. Another company, PsiQuantum — still private — is building on photons, meaning particles of light. The French company PASQAL is building on neutral atoms controlled by lasers. And Microsoft is pursuing an approach that no one else quite replicates — one that, if it works, could leave all the others behind. Nobody knows which format will win. It’s exactly like the early nineties, when it wasn’t clear whether the internet would travel through telephone cables, through TV cables, or through something else entirely. At a stage like this, building a small portfolio divided between several companies is probably a smarter strategy than betting on a single winner. Not all of them will succeed — but whoever holds all of them will hold the winner too.
And there’s another layer worth knowing about: some of the most interesting companies in the space are still private — they’ve already raised tens and hundreds of millions of dollars and aren’t yet publicly listed (meaning you can’t buy their shares on the stock exchange). The successful ones will want to reach the public markets one day, and we can expect to see more IPOs in the coming years. That matters, because the biggest winners in the space may not be public yet today — just as Google wasn’t public when Netscape (who?) was already trading on Wall Street. Google came to its IPO in 2004, years after the internet had already “worked,” by which point it was already a giant — and since then the stock has risen thousands of percent. Even those who bought after the IPO, when the company was already worth billions, still made a lot of money.
The second way — mixed-exposure stocks, meaning tech giants for whom quantum computing is part of their research, not the whole business. In this space, IBM has been investing in the field for the most years and with the most consistent approach — and the U.S. government just rewarded that with a commitment of $1 billion in funding for this area alone. Google itself holds one of the most advanced labs in the world. And Microsoft isn’t standing still — it’s presenting a completely different approach to building the computer that, if proven, could be a major leap forward. When you buy these stocks, quantum comes as a kind of option: the existing business holds you in place, and the revolution — if and when it arrives — arrives as a bonus.
We’re in 1999 for quantum computing. The technology is real. The big victories are still ahead of us. Whoever invested in Google in 2004, three years after the internet bubble burst and the dust had settled — made a lot of money. This story doesn’t begin and end with the question “will quantum succeed?” It begins with the question “when” — and with the question that follows from it: how much of your portfolio are you willing to put into a project that belongs to the next decade, not the next year.
See you in next week’s letter, or during the week — if I can’t help myself until then...