A Technology Inflection Point, Backed by Record Capital
The Defiance Quantum ETF (QTUM) returned 36.69% in 2025 and 50.54% in 2024 — outpacing the Nasdaq 100, which returned 20.77% and 25.58% in those same years — at a moment when the quantum computing sector was generating its most significant hardware milestones in a generation. For most of the prior decade, quantum computing occupied an unusual position in the technology landscape: universally acknowledged as transformational in theory, yet perpetually “10 to 20 years away” in practice. That narrative shifted materially in 2025 and into 2026, as breakthroughs from Google (GOOGL), IBM (IBM), and Microsoft (MSFT) converged with a wave of new public market entrants and record private capital to accelerate the commercial timeline. Past performance is not indicative of future results.
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Forget margin or options. Here's how the pros trade IBMGoogle made headlines in December 2024 with its Willow chip, which achieved below-threshold quantum error correction on superconducting qubits — a benchmark researchers had been chasing for 30 years. By October 2025, Google had demonstrated a 13,000× speedup over the Frontier supercomputer using just 65 qubits, results published in Nature. IBM, not to be outdone, unveiled its Nighthawk processor in November 2025 — a 120-qubit chip with support for up to 5,000 two-qubit gates — and publicly targets practical quantum advantage by year-end 2026, with fault-tolerant computing in its roadmap for 2029. Microsoft introduced the Majorana 1 chip in February 2025, built on a novel topological core architecture designed to eventually scale to 1 million qubits on a single device, though significant scientific questions about the approach remain.
Meanwhile, commercial deployment has begun in earnest. Quantinuum launched its Helios system in November 2025 with 98 fully connected physical qubits. Early enterprise customers include JPMorgan Chase (JPM), Amgen (AMGN), BMW, and SoftBank (SFTBY). HSBC used IBM’s Heron quantum computer to improve bond trading prediction accuracy in September 2025 — what many analysts describe as the first documented quantum-enabled edge in algorithmic trading.
Private capital has followed these milestones with remarkable speed. Quantum equity funding in the first nine months of 2025 reached $3.77 billion — nearly triple all of 2024. Individual raises have been substantial: PsiQuantum closed a $1 billion Series E at a $7 billion valuation, Quantinuum raised $800 million, and IonQ (IONQ) completed a $2 billion institutional equity offering. On the government side, global public funding reached $10 billion by April 2025, with Japan committing $7.4 billion as part of a national quantum strategy. McKinsey’s June 2025 Quantum Technology Monitor concluded that accelerating investment and faster-than-expected hardware progress could propel the quantum market to $100 billion within a decade.
QTUM vs. Nasdaq 100 (QQQ) — Selected Performance Periods
2025: QTUM +36.69% vs. QQQ +20.77% • 2024: QTUM +50.54% vs. QQQ +25.58% • 1-Year (to 1/31/26): QTUM +42.12% vs. QQQ +19.57% • 3-Year annualized: QTUM +39.69% vs. QQQ +29.02%
Past performance is not indicative of future results.
A New Wave of Quantum Computing IPOs and Public Market Entrants
One of the most significant structural shifts in the quantum computing investment landscape over 2024–2026 has been the rapid expansion of investable public market options. Where investors once had limited choices beyond large-cap technology companies with quantum research divisions, a cohort of dedicated quantum computing companies has now entered the public markets — bringing both opportunity and heightened volatility.
IonQ (IONQ) was among the earliest pure-play quantum companies to go public, completing its SPAC merger in 2021 at a valuation that has since expanded dramatically alongside growing revenue. The company’s trapped-ion platform has attracted enterprise contracts across defense, healthcare, and financial services, and its 2025 equity raise of $2 billion signaled strong institutional appetite for the name.
Rigetti Computing (RGTI) also entered public markets via a 2022 SPAC transaction and has since attracted a wave of fresh Wall Street coverage. In late 2025, B. Riley, Rosenblatt, and Wedbush all initiated coverage with Buy ratings — a notable cluster of optimism that reflects the sector’s improved credibility following the year’s hardware milestones.
D-Wave Quantum (QBTS) has been publicly traded the longest among pure-play quantum names and has pursued a different path through its quantum annealing architecture, which is purpose-built for optimization rather than general computation. In 2024, D-Wave acquired Quantum Circuits Inc. for $550 million, consolidating its position and expanding its capability set.
Looking ahead, the IPO pipeline for quantum computing remains active. SandboxAQ, which raised $450 million in a Series E at a $5.75 billion valuation in 2025 and focuses on AI and quantum-sensing applications, is widely viewed as a potential future public market entrant. Quantinuum, valued at $10 billion following its $800 million funding round, represents another closely watched candidate. PsiQuantum, pursuing photonic quantum computing in partnership with GlobalFoundries using standard semiconductor manufacturing processes, raised $1 billion in a Series E at a $7 billion valuation — an approach that, if successful, could dramatically accelerate the path to scale.
For investors, the expanding universe of public quantum companies increases portfolio construction flexibility but also intensifies the need for selectivity. Companies in the quantum computing IPO pipeline carry the full spectrum of pre-revenue technology risk, and early trading history for SPAC-originated quantum names has demonstrated that valuations can move violently in both directions depending on news flow, rate environment, and broader risk sentiment.
A Broader Tailwind: The AI Infrastructure Buildout
Quantum computing doesn’t exist in isolation. The same hyperscaler capital cycle driving AI infrastructure investment is also creating demand for the semiconductors, chip manufacturing equipment, and cloud computing capacity that form the backbone of any quantum-adjacent portfolio.
The four largest hyperscalers — Amazon (AMZN), Microsoft, Google, and Meta (META) — spent approximately $381 billion combined on capital expenditures in 2025, with the vast majority directed at AI infrastructure. For 2026, combined guidance escalates to an estimated $635–690 billion, driven by data center construction, GPU procurement, and power infrastructure. Companies like NVIDIA (NVDA) have been direct beneficiaries: the chipmaker reported $130.5 billion in fiscal 2025 revenue, up 114% year-over-year, with data center revenue alone at $115.2 billion. Advanced Micro Devices (AMD) posted record revenue of $34.6 billion in 2025, targeting a 60% compound annual growth rate in its data center segment.
This spending wave reaches deep into the semiconductor supply chain — touching chip fabrication, testing equipment, advanced packaging, and photonics companies that overlap with quantum hardware development. For investors, that intersection offers potential: a portfolio structured around quantum computing themes could also carry substantial exposure to the near-term AI infrastructure buildout, providing revenue-generating ballast alongside the longer-duration quantum thesis.
Companies at the Intersection: IonQ, Rigetti, and D-Wave
Among the pure-play quantum names attracting significant analyst attention, we believe three stand out for their commercial traction, research milestones, and market visibility.
IonQ (IONQ) is the largest pure-play quantum computing company by revenue among publicly traded names, guiding for $106–110 million in 2025 revenue. The company’s trapped-ion architecture — which encodes qubits in individual atoms held in electromagnetic traps — is generally regarded as producing higher gate fidelity than competing superconducting approaches, at the cost of slower gate speeds. IonQ carries a Moderate Buy consensus on TipRanks from 10 analysts, with an average 12-month price target of $72.75 and a wide target range of $35–$100 that reflects genuine disagreement about how quickly the company can scale commercially. IonQ reported a net loss of $177.5 million in Q3 2025 alone, underscoring that profitability remains a multi-year story.
Rigetti Computing (RGTI) focuses on superconducting qubit systems and has attracted a cluster of initiations from Wall Street coverage in late 2025, including Buy ratings from B. Riley, Rosenblatt, and Wedbush. The company’s 7 covering analysts on TipRanks carry an average price target of $38.75. Rigetti generated $1.9 million in Q3 2025 revenue and reported operating losses of approximately $20 million per quarter — a financial profile typical of early-stage deep technology companies, but one that requires investors to maintain a long time horizon.
D-Wave Quantum (QBTS) takes a differentiated approach through quantum annealing, a technique well-suited for specific optimization problems rather than general-purpose quantum computation. D-Wave has the distinction of a perfect 10 TipRanks Smart Score — the platform’s highest possible rating — and carries a Strong Buy consensus from 13 analysts with an average target of $41.25, including $46 from Mizuho and $48 from Needham. Revenue remains lumpy: Q1 2025 showed a 509% spike to the end quarter at $15M from a single large system sale, while Q3 came in at $3.7 million, illustrating the concentration risk embedded in early-stage enterprise hardware contracts.
What Investors Should Weigh Before Adding Quantum Exposure
The quantum computing narrative is compelling, but investors considering exposure to this theme should approach it with clear-eyed awareness of the material risks involved.
Volatility in pure-play quantum stocks is extreme by any conventional measure. IonQ’s 52-week range spans from $17.88 to $84.64 — a spread of over 370%. Rigetti has experienced moves from $22 to $56 and back toward $23 within a single cycle. Single news events — chip announcements, earnings misses, analyst downgrades — can move these stocks 20–30% in a session. Investors who cannot tolerate that level of intraday and weekly price movement should weigh their exposure carefully.
Valuations are stretched by any traditional metric. Rigetti trades at approximately 975× trailing price-to-sales. D-Wave is around 376×. IonQ, with the most substantial revenue base among the three, trades at roughly 158× price-to-sales. These multiples price in years of exponential revenue growth that may or may not materialize on the expected timeline. As one analyst noted, Rigetti’s multi-billion-dollar market capitalization against roughly $22 million in projected 2026 revenue requires a substantial act of faith in future outcomes.
The technology timeline itself remains uncertain. IBM targets practical quantum advantage by end of 2026 and fault-tolerant computing by 2029. Most analysts and researchers place commercially widespread quantum applications 5–10 years away. Five competing hardware architectures are currently vying for dominance — superconducting, trapped-ion, topological, quantum annealing, and photonic — and it is genuinely unclear which approaches will prove most scalable. Error correction remains the primary technical barrier, and while progress has been real, the gap between laboratory demonstrations and commercially deployable systems remains significant.
Large technology companies — Google, IBM, Microsoft, and Amazon — all have substantial quantum programs backed by diversified cash flows and multi-billion-dollar R&D budgets. They represent both the most likely route to widespread quantum adoption and a meaningful competitive threat to smaller pure-play companies. Consolidation is already underway; D-Wave acquired Quantum Circuits for $550 million, and IonQ has proposed acquiring SkyWater Technology for $1.8 billion. Pure-play companies may be acquisition targets, but they may also be outcompeted.
Finally, quantum pure-plays collectively raised approximately $4.15 billion through share offerings in 2025, creating meaningful dilution risk for existing shareholders. Investors should factor ongoing capital requirements into their analysis when evaluating position sizing.
Accessing the Quantum Computing Theme
For investors who have weighed these dynamics and are considering how to add quantum computing to their investment portfolio, one structural challenge is concentration risk. Holding individual pure-play quantum stocks means accepting the full force of single-company volatility and idiosyncratic execution risk. A broader thematic approach — including exposure to the semiconductor and AI infrastructure companies that benefit from the same technology buildout — can provide some diversification, though it comes at the cost of diluting the pure quantum thesis.
One approach some investors consider is thematic ETFs that span quantum computing, machine learning, and AI infrastructure within a single diversified vehicle. The Defiance Quantum ETF (QTUM) tracks the BlueStar Quantum Computing and Machine Learning Index across 83–85 holdings using a modified equal-weight methodology that caps individual positions near 2%. The fund’s subsector breakdown as of December 31, 2025 included 36% in quantum computing technology, 18.6% in machine learning services, 17% in big data and cloud computing, 14.5% in AI and application chips, and 13.9% in GPU and other hardware, with a 0.40% expense ratio. Past performance is not indicative of future results, and investors should review the fund’s prospectus carefully before making any investment decisions.
TipRanks’ aggregated analyst consensus across QTUM’s underlying holdings stands at Moderate Buy, based on 64 Buy and 14 Hold ratings across 78 covered stocks, with an average 12-month price target implying approximately 16.65% upside from recent levels. This consensus is a reflection of analyst views on individual underlying holdings and should not be interpreted as a guarantee or prediction of fund performance.
Bottom Line
Quantum computing has moved from a speculative research narrative to a sector with documented commercial deployments, record private investment, and credible near-term milestones from the world’s largest technology companies. The investment case is real. So are the risks: pre-revenue companies trading at extreme multiples, a technology timeline that remains genuinely uncertain, and volatility that can be severe.
For investors thinking about quantum computing exposure, the question is less whether the technology will matter — the evidence suggests it will — and more about how to size and structure a position that reflects both the opportunity and the uncertainty. Depending on an investor’s risk tolerance, time horizon, and existing portfolio, the right approach may range from a modest thematic allocation to no direct exposure at all. As with any emerging technology investment, consulting with a qualified financial advisor before making allocation decisions is worth the time.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Performance current to the most recent month-end can be obtained by calling 833.333.9383. Short term performance, in particular, is not a good indication of the fund’s future performance, and an investment should not be made based solely on returns. Market price is the price at which shares in the ETF can be bought or sold on the exchanges during trading hours, while the net asset value (NAV) represents the value of each share’s portion of the fund’s underlying assets and cash at the end of the trading day. Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund including its top 10 holdings, please call 833.333.9383 or visit our website at www.defianceetfs.com/jedi/. Read the prospectus or summary prospectus carefully before investing.
The Fund is not actively managed and would not sell a security due to current or projected under performance unless that security is removed from the Index or is required upon a reconstitution of the Index. A portfolio concentrated in a single industry or country, may be subject to a higher degree of risk. The value of stocks of information technology companies are particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition. The Fund is considered to be non-diversified, so it may invest more of its assets in the securities of a single issuer or a smaller number of issuers. Investments in foreign securities involve certain risks including risk of loss due to foreign currency fluctuations or to political or economic instability. This risk is magnified in emerging markets. Small and mid-cap companies are subject to greater and more unpredictable price changes than securities of large-cap companies.
The possible applications of quantum computing are only in the exploration stages, and the possibility of returns is uncertain and may not be realized in the near future. The “BlueStar Quantum Computing and Machine Learning IndexTM”,”BQTUM IndexTM” (collectively “Quantum Computing and Machine Learning Index”), is the exclusive property and a trademark of BlueStar Global Investors LLC d/b/a BlueStar Indexes® and has been licensed for use for certain purposes by Defiance ETFs LLC. Products based on the Quantum Computing and Machine Learning Index are not sponsored, endorsed, sold or promoted by BlueStar Global Investors, LLC or BlueStar Indexes®, and BlueStar Global Investors, LLC and BlueStar Indexes® makes no representation regarding the advisability of trading in such product(s).
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QTUM is distributed by Foreside Fund Services, LLC.