MW Quantum computing works - now investors will see if the stocks do too
By Charlie Garcia
Charlie Garcia responds to readers about the opportunities and obstacles for investors in quantum computing
Editor's note: Columnist Charlie Garcia shares select emails and online comments from his virtual mailbag each week.
Dear Charlie,
I see three investment lanes for quantum computing: pure plays like IonQ $(IONQ)$ and Rigetti (RGTI); the "Magnificent Seven" giants with quantum divisions; and infrastructure picks-and-shovels.
Which lane has the best risk-reward?
Mason
Dear Mason,
All three lanes lead somewhere. The question is which one fits your risk tolerance.
Pure plays like IonQ, Rigetti Computing and D-Wave Quantum (QBTS) are lottery tickets with better odds. They're not competing with the Magnificent Seven; they're auditioning to be acquired by them. If one of these companies cracks a genuine commercial advantage, it becomes a buyout target overnight. High risk; asymmetric upside.
The Mag Seven are already in: Alphabet $(GOOGL)$ $(GOOG)$, Microsoft $(MSFT)$, Amazon.com (AMZN) have billion-dollar quantum programs. So does IBM $(IBM)$. You're not betting on whether they'll participate. You're betting on whether quantum becomes material to their earnings this decade. Safer, but the quantum upside is diluted by everything else in the stock.
Infrastructure is where the near-term money lives.
Infrastructure is where the near-term money lives. Post-quantum cryptography is already a compliance issue. NIST standardized new algorithms in 2024, and every government contractor, bank and defense company needs to upgrade. That's not speculative. That's a budget line-item.
The picks-and-shovels play isn't qubits. It's the classical-quantum interface: cryogenic systems, control electronics, error-correction software. Less sexy than "we built a quantum computer" - and more likely to generate revenue this decade.
My bias? I own positions across all three lanes, but I'm most interested in security infrastructure. That's the toll road everyone has to drive on.
Diversified but opinionated,
Charlie
P.S. The best investors in the mobile revolution didn't bet on which phone would win. They bet on Qualcomm's $(QCOM)$ chips inside all of them.
Dear Charlie,
Quantum computing is just another fantasy - like AI was for decades. Error correction is still unsolved.
This is vaporware.
Nancy
Dear Nancy,
Error correction was unsolved. Past tense.
In December 2024, Google's Willow chip became the first quantum processor to demonstrate "below threshold" error correction. That's the holy grail physicists have chased for 30 years. The chip showed that scaling up qubit arrays, from 3×3 to 5×5 to 7×7, reduced error rates instead of compounding them. That's never happened before.
Three weeks later, Microsoft announced a breakthrough in topological qubits. Amazon's Ocelot chip cut error-correction costs by 90%. IBM confirmed it's on track for a 100,000-qubit system by 2029. A University of Chicago professor called it "escape velocity."
You're right that quantum computing was vaporware for decades. So was AI. In 2020, experts said artificial general intelligence was 50 years away. In 2024, AI writes code, passes the bar exam and diagnoses cancer better than radiologists.
The difference between "decades away" and "here" is usually about 18 months of denial.
Still skeptical after all these years,
Charlie
P.S. The best time to invest in a technology is when smart people still think it's a fantasy.
Dear Charlie,
North Korea stole $2 billion in crypto in 2024. When quantum computing matures, all encryption is at risk. What makes you think bitcoin (BTCUSD) survives?
Alex
Dear Alex,
You're conflating two different problems: hackers and hardware.
North Korea didn't crack bitcoin's cryptography. It compromised employees. The Bybit heist, around $1.5 billion, came from social engineering and insider access, not supercomputers. That's not a quantum threat. That's a human one.
Now, the real question: What happens when quantum computers can break elliptic curve cryptography?
Answer: Everything breaks. Not just bitcoin. Google, Microsoft, the U.S. Federal Reserve, every bank, every military system, every government database on earth. If quantum computing cracks bitcoin, it's already cracked the entire digital infrastructure of modern civilization. Bitcoin isn't the first domino. It's somewhere around the 40th.
But here's what the doomsayers miss: bitcoin upgrades. The U.S. government's National Institute of Standards and Technology (NIST) - the same agency that sets the standards for everything from weights and measures to cybersecurity - standardized quantum-resistant cryptographic algorithms in 2024.
The bitcoin network can migrate to post-quantum signatures. Active coins move to new addresses with new encryption.
Lost bitcoins, including founder Satoshi's, stay frozen in old addresses. That's roughly 4 million coins in vulnerable P2PK addresses that become unspendable. Security goes up. Circulating supply goes down. That's not a death sentence for bitcoin. That's a supply shock.
Timeline? Nvidia (NVDA) CEO Jensen Huang says 15 to 30 years before quantum computers can break current encryption. Bitcoin security expert Jameson Lopp estimates bitcoin needs five to 10 years to complete a migration. The math works.
Quantum computing is a threat to everything. That's exactly why it isn't a special threat to bitcoin.
Watching the sausage get made,
Charlie
P.S. North Korea's hackers don't need quantum physics. They just need your password.
Dear Charlie,
Horizon scanning is no longer optional. First movers will be those who translate technical complexity into business strategy.
Don't you agree?
Sarah
Dear Sarah,
Exactly right. The companies that win won't be the ones with the most qubits. They'll be the ones who figure out what to do with them first.
Qubits are a vanity metric. Error-corrected, commercially viable quantum systems are the real race. The winners will be the ones that turn physics experiments into recurring revenue.
You're right that horizon scanning is no longer optional. The companies that spot quantum's commercial applications first will own the decade. The ones still waiting for proof of concept will be writing case studies about what they missed.
Eyes on the horizon,
Charlie
P.S. The best business strategies are written by people who understand what the technology can't do yet.
Dear Charlie,
You're right that "wafer-scale cryogenic integration" makes investment decisions difficult. But when the railroad was hard to explain, the travelers were few.
When it worked, they were 100 times more numerous. I'm buying the complexity.
Pierre
Dear Pierre,
You understand something most investors don't: The more revolutionary the technology, the harder it is to evaluate. "Wafer-scale cryogenic integration" doesn't fit in a spreadsheet.
Neither did "horseless carriage" in 1905.
The best investors in transformational technologies aren't the ones who understand physics. They're the ones who understand the implications.
You're buying the complexity. I'm right there with you.
Fellow traveler,
Charlie
P.S. Nobody who bought Standard Oil stock could explain fractional distillation either.
Charlie Garcia is founder and a managing partner of R360, a peer-to-peer organization for individuals and families with a net worth of $100 million or more. He has no position in any of the companies or investments mentioned in this article.
Agree? Disagree? Share your comments with Charlie Garcia at charlie@R360Global.com. Your letter may be published anonymously in the weekly "Dear Charlie" reader mailbag.
By emailing your comments to Charlie Garcia, you agree to have them published on MarketWatch anonymously, or with your first name if you give permission. You understand and agree that Dow Jones & Co., the publisher of MarketWatch, may use your story, or versions of it, in all media and platforms, including via third parties.
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-Charlie Garcia
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December 29, 2025 09:50 ET (14:50 GMT)
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