IBM Announces Plan to Build World’s First Large-Scale Quantum Computer

Tech giant IBM (IBM) announced on Tuesday that it is building Starling, the world’s first large-scale quantum computer designed to run without errors. The computer will be launched by 2029 and housed at IBM’s new quantum data center in upstate New York. Interestingly, Starling will be able to perform 20,000 times more operations than current quantum computers and is expected to handle complex tasks like drug discovery, supply chain optimization, semiconductor design, and financial risk analysis.

It is worth noting that competition in quantum computing is heating up, as tech giants Amazon (AMZN), Google (GOOGL), and Microsoft (MSFT), along with smaller companies like D-Wave (QBTS) and IonQ (IONQ), are all developing their own quantum technologies. Indeed, Google recently introduced its Willow chip with error correction, while IBM’s Starling will use a more efficient system called qLDPC to reduce errors and improve scaling. Unlike traditional computers that use bits, quantum computers use qubits, which can represent both 1 and 0 at the same time.

However, qubits are fragile and error-prone, which has been a major hurdle for quantum computing. Nevertheless, IBM says that its new qLDPC system will make error correction faster and more scalable than Google’s surface code, which needs more qubits and takes up more space. This could give IBM a potential advantage, as other companies may need to license qLDPC or create their own alternative. As a result, IDC analyst Heather West called Starling a major milestone and predicted that the quantum industry will grow to $8.6 billion by 2028.

What Is the Target Price for IBM?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on IBM stock based on eight Buys, five Holds, and two Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average IBM price target of $262.15 per share implies 5% downside risk.

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