By Mackenzie Tatananni
Quantum mania has become a staple of the tech sector, dismissed by some as irrational exuberance. However, the bigger risk may not be excessive hype -- but that expectations still underestimate the long-term opportunity.
Barclays analysts expect the next five years to "reshape computational power" as developers make progress toward delivering scalable systems that finally outpace traditional computers. The challenge remains proving the technology can handle more than lab-scale demonstrations.
But a major catalyst could be just around the corner. Barclays predicts that by 2027, quantum systems will finally prove their superiority over classical computers in real-world applications -- assuming those results withstand rigorous technical scrutiny.
Conversations with experts in the field indicate true quantum advantage could be further away, and even then, it's unclear how the achievement will be benchmarked. Barclays analysts believe advantage will be proven when systems hit 100 logical qubits.
The delivery of fault-tolerant systems by 2030 will be "the most material inflection-point for quantum computing," analysts wrote, "although we acknowledge that in the medium term, the scalability of quantum chips remains one of the most technical challenges the industry needs to resolve to reach full-scale commerciality."
One of the largest misconceptions the firm sees today is the belief that quantum will completely upend traditional computing. In reality, the two are complementary: Quantum systems are expected to act as powerful supplements, tackling problems that would otherwise take prohibitive time, energy, or processing power to solve.
And rather than cannibalizing demand for classical computing, the firm expects demand to ramp up, to the tune of $100 billion by 2040. Conversations with partners in Silicon Valley suggest the demand for GPUs for quantum error correction "is shaping up to be large," the firm added.
Nvidia is one company that has promoted a hybrid quantum-classical approach. While the company has an obvious incentive to keep its classical processors relevant, this vision is shared by most players in the quantum industry.
Even in the unlikely scenario that cannibalization occurs, Barclays believes it could be at least partially offset by increased computing demand resulting from quantum error correction, which runs on classical systems.
In a similar vein, quantum won't crack traditional cybersecurity protocols overnight. "There is a misconception on how much progress quantum computing has been made on breaking modern encryption methods," analysts wrote.
It's easy to see why. Quantum-safe encryption is being marketed as the essential shield against future cyberattacks. Barron's explored this point in August, examining quantum's potential risks to crypto wallets and the blockchain security.
The argument seems to have held up since then that modern encryption standards aren't yet at risk, "although if hardware performance scales according to current roadmaps, we could be closer by the end of the decade," Barclays said.
Perhaps the most significant takeaway is that the quantum landscape offers far more entry points than the market currently realizes. Among the pure plays, IonQ, Rigetti Computing, and D-Wave Quantum are three heavily watched names. Quantum Computing, a beverage distributor-turned-quantum chip manufacturer, is also gaining traction.
Then there are the larger companies, International Business Machines and Google, that have quantum efforts folded into a larger business. Honeywell-owned Quantinuum could go public as soon as this year, a source told Barron's, joining a growing number of market newcomers.
But the total scale of the investment opportunity is overlooked, according to Barclays, which has identified 45 publicly traded and 80 private companies that play some role in the "quantum value chain."
Given that multiple quantum modalities could co-exist in the future, "suppliers with exposure to multiple modalities could present more diversified risk profiles," the firm wrote. Included are test-equipment players like Keysight Technologies, photonics companies like Coherent, and isotope enrichers like ASP Isotopes.
The firm sees a significant overlap with traditional semiconductor manufacturing, potentially presenting a long-term revenue opportunity for companies like ASML, Applied Materials, and Lam Research. Software vendors that design and simulate quantum chips -- including Synopsys and Cadence -- "also play an important role in resolving scalability challenges."
And then there are the so-called ecosystem enablers: cloud compute and infrastructure providers like Microsoft and Amazon that enable broader access to quantum processing units. Dell Technologies and Japan's Hitachi are two other names to watch in that space.
Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
May 06, 2026 13:16 ET (17:16 GMT)
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