Quantum Computing Opportunities

This IBD article by Brian Deagon (below) is a great read about where and how “new” technologies are progressing, quantum computing. I am constantly reading reading reading – researching. Always looking for new ideas, which can become opportunities, which I then watch for the technical action hence the SETUP/TRIGGER (accumulation, SOSes, pre-bkos, bkos – ultimately uptrends). For instance, for many many months I was reading about, then watching, observing – cloud computing, also now edge computing. I discussed these on 11/26:

The QQQ, thanks to FAANGs and newer software stocks, would be much lower, old tech – COMIs, plus telecoms are holding up the index. I was very early to begin posting telecoms, the sector is doing beautifully – they have become leaders. Also restaurants, big medical and medical equipment. I continue to believe those cloud stocks and the “edge” technology have outstanding potential. The stocks which lead the market in the “corrections” become the great performers out of that correction. I am trading very little these days, mostly options, no trades Friday – but do you think I am not working just as hard tho?

And those cloud stocks then became the #1 group out of the December 2018 shakeout. I began recommending those stocks in 2018 – TEAM and WDAY were on my 4/2 stock list, TWLO on 8/7, ZS on 6/29, FTNT on 8/3, TTD on 8/10, and they were all on my 12/21 stock list along with CRM. All of these except for FTNT have gone on to new all-time highs. I have a list started for quantum computing stocks, none of them are listed in the article below.

 

From IBD:

A race is on to merge two of the biggest scientific breakthroughs of the 20th century — computer science and quantum physics — to achieve a giant leap in technology called quantum computing. And a host of quantum computing companies are clamoring for a piece of the action.

Quantum computers have the potential to become one of the great scientific breakthroughs of the 21st century. The technology remains in its early stages but is progressing fast. Businesses, governments, institutions and universities have made it a high priority, with billions of dollars invested.

The idea was proposed by Nobel Prize-winning physicist Richard Feynman in 1982. Experts envision computers that perform tasks the most powerful supercomputers can’t handle. They predict that quantum computers will someday transform drug manufacturing, make artificial intelligence more powerful, lower manufacturing costs, improve defense capabilities, provide better weather modeling and lower energy costs, among other things.

“It’s a completely different way of computing, a different beast entirely, and the most significant improvement in computation in the last century,” said Bob Sutor, vice president of IBM’s quantum computing program. “It offers the opportunity to rethink so much of what we’ve achieved.”

IBM (IBM) is one of the first quantum computing companies and has researched the technology as far back as 1973. In 2016 it introduced the first of several quantum computers, which were among the first on the market.

“The progress on making quantum computers is much faster than anyone imagined,” Sutor said.

What Is Quantum Computing Simplified?

Quantum computing companies face a big challenge. Their computers operate in the bizarre and counterintuitive world of quantum mechanics, where subatomic particles like electrons and photons can seemingly exist in multiple states.

Here are a few of the reasons why quantum computing is so appealing:

  • Computers today process data in a linear sequence, where data are encoded into binary bits of one or zero. But a quantum bit, or “qubit,” can represent ones and zeros simultaneously.
  • Qubits can exist in two states at once, enabling multiple computations to be handled at the same time. It’s roughly the equivalent of being able to read every book in a library at once, instead of one at a time.
  • A computing task that could take a supercomputer days or even weeks to complete could, in theory, be solved by quantum computers in seconds.
  • Quantum computing can perform seemingly impossible calculations and provide thousands of alternatives in the blink of an eye.
  • Quantum computers could one day tackle problems currently seen as too complex and exponential in nature for classical systems to handle.

In early January IBM unveiled its newest version of a quantum computer, called IBM Q System One. As IBM has done with previous quantum computers, the system is not for sale but can be accessed for free by qualified users for commercial use through IBM’s cloud-based Q Experienceplatform.

Since May 2016, IBM says more than 100,000 users, including scientists and academics, have run more than 6.7 million experiments, many of them focused on chemistry and material science.

Investing In Quantum Computing Companies

Investors interested in the technology won’t find pure-play quantum computing companies trading on today’s stock market. But plenty of big tech players are developing quantum computing technology. Besides IBM, they include Microsoft (MSFT), Alphabet (GOOGL), Intel(INTC) and Lockheed Martin (LMT). China tech giants Alibaba (BABA), Baidu (BIDU) and Tencent Holdings (TCEHY) are heavily invested in the technology as well.

It doesn’t stop with tech-oriented companies. Wall Street brokers Goldman Sachs (GS) and JPMorgan Chase (JPM) also are studying the technology, as are hedge funds. Future applications of quantum computing include finding new ways to model financial data and minimize risks to make better investments. Experiments with quantum computers include picking the best combination of stocks for an investment portfolio, considering what might likely happen to each stock, and all the combinations of everything in, for example, a basket of 100.

A host of quantum computing companies have significant venture capital support. They might become candidates for an initial public offering later. These companies include Rigetti Computing, based in Berkeley, Calif., and Canada-based D-Wave Systems.

D-Wave has received more than $220 million in funding. Investors include Goldman Sachs, Bezos Expeditions — which manages the investments of Amazon.com (AMZN) Chief Executive Jeff Bezos — and venture capital firm DFJ. D-Wave’s customers include Lockheed Martin, Google and NASA. Based in Vancouver, the U.S. operations of D-Wave are in Palo Alto, Calif.

D-Wave technology has been used for selecting investments in financial portfolios, finding promising candidates for new drug development, and studying genomics and particle physics. Volkswagen (VWAGY) has used D-Wave systems to help it design next-generation batteries, optimize solar cells, and tackle tricky traffic situations and ridership analysis.

Rigetti Computing has received more than $119 million in funding, mostly from venture capital firms that include Andreessen Horowitz.

Quantum Computers Enter Chaotic State

While these new devices are incredibly powerful, they’re also high maintenance. Quantum computers are fragile, highly sensitive to noise, temperature, tremors and magnetic waves. Any outside disturbance can cause the quantum state to collapse.

The finicky computers must operate at temperatures colder than deep space. They typically enter a chaotic state and need a reset after about 100 microseconds of computing.

“There’s a lot of hype surrounding quantum computers,” said Daniel Lidar, director of the Center for Quantum Information Science and Technology at the University of Southern California. “Intellectually, and as an academic, it’s revolutionary. But it’s quite far from having a major impact on the world of computing, where you hear about how it’s going to revolutionize everything from medicine to manufacturing and so on.”

Still, Lidar’s not a skeptic about the potential.

“Quantum computing is going to happen. We’re well on our way to achieving it,” he said. “But at this point it’s most likely to be fairly niche in terms of what the applications are going to be.”

Still, the machines can do research on things that were previously only done in a lab. Early applications for quantum computers include uses in chemistry and complicated exotic materials.

Quantum Computing Supremacy

The overall goal is to achieve what some experts call “quantum supremacy.”

That will come when a quantum computer can remain in a stable state and achieve computations that today’s most powerful supercomputers cannot handle.

How far away are quantum computing companies from achieving supremacy? Estimates range from an optimistic three years to more than 10 years.

Part of the challenge: The more qubits in a quantum computer, the more error-prone they become.

“Without error suppression, there’s no way quantum computing can overtake classical computing,” Lidar said.

Major Announcements By Quantum Computing Companies

In November 2017, IBM unveiled a 50-qubit quantum computer, one of the largest of its kind at the time. In March 2018, Google unveiled Bristlecone, a 72-qubit system. Bristlecone will be used as a testing ground for qubit technology, including applications in quantum simulationoptimization, and machine learning. Google is working with NASA on the project.

“We are cautiously optimistic that quantum supremacy can be achieved with Bristlecone,” Google said in a blog post at the introduction.

Microsoft has several quantum computing projects underway. Most recently, Microsoft established a partner program with 14 different quantum computing companies that are software startups.

Microsoft, Google and IBM have all released open-source software tools to help coders familiarize themselves with writing programs for quantum hardware.

The technology has national security implications in areas such as cybersecurity and communication, radar, imaging, navigation and stealth technology. Today’s best cryptography methods will be in jeopardy once larger, more powerful quantum computers exist. That technology could be more than 20 years out, but it’s a concern now.

Government Role In Quantum Computers

Little wonder, then, that the U.S., the U.K., Russia, China and other countries are investing billions in quantum computing technology. Whoever leads in making the computers useful could gain huge economic and national security advantages.

President Donald Trump in late December signed the National Quantum Initiative Act into law. It provides more than $1.2 billion in spending to coordinate research and development efforts in quantum computers.

The law came together in a rare moment of bipartisanship.

“Countries that harness the power of quantum technology will revolutionize conventional computing systems,” U.S. Rep. Lamar Smith, R-Texas, said in prepared remarks at the time. He was a co-sponsor of the legislation in the House, where it passed 348-11. The Senate vote was unanimous.

“Quantum computing is critical to our economic and national security,” Smith said.

The European Union has launched a $1.1 billion quantum research plan.

China is reportedly investing $11 billion to develop a laboratory for researching quantum technology. Set to open in 2020, it will be one of the largest facilities for quantum research.

“It has a lot of the hallmarks on an arms race,” said Lidar. “The militaries and security agencies of the world are engaged in this story.”

 

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About traderscott 1128 Articles
Trader Scott has been involved with markets for over twenty years. Initially he was an individual floor trader and member of the Midwest Stock Exchange, which then led to a much better opportunity at the Chicago Board Options Exchange. By his early 30’s, he had become very successful in markets, but a health situation caused him to back away from the grind of being a full time floor trader. During this time away from markets, Scott was completely focused on educating himself about true overall health and natural healing which remains a passion to this day. Scott returned to markets over fifteen years ago where he continues as an independent trader.