Quantum Computing Leaps Back Into the Scene
Quantum Computing stocks have been quiet for several months now after broadly selling off earlier this year. Readers know that I had made IBM ($IBM) my name for quantum computing exposure after touring through the world of IonQ ($IONQ), D-Wave ($QBTS) and Infleqtion ($INFQ). None of these names have done especially well since. IBM sold off and has worked its way sideways to higher. The sales that we made in the other names all ended up being good sales.
Now, out of the blue, there is news. On Wednesday morning, IonQ announced a major milestone in fault-tolerant quantum computing. Researchers at IonQ demonstrated the development and successful testing of the industry’s first end-to-end real-time quantum error correction decoder that runs on a single standard off-the-shelf CPU (central processing unit).
Why is this a big deal? According to the company, “Quantum error correction is essential for building practical, fault-tolerant quantum computers because physical qubits are inherently sensitive to environmental noise.”
“However, finding and fixing those errors in real time has historically presented a significant computing challenge. In conventional approaches, the classical computers tasked with decoding errors can easily become overwhelmed. That creates a processing bottleneck that forces the quantum computer to pause and wait.”
According to the company, this “breakthrough demonstrates that a single, standard computer processor can manage this complex workload continuously in the background, keeping the quantum system running at full speed.”
What It Means
In plain English, the concept of scaling quantum computing capabilities just became more economical to imagine, because, as the company says, it is confirming that “classical hardware overhead does not need to scale exponentially as quantum systems grow wider in logical qubits or deeper in operations.” That, in turn, very likely pulls that future years ahead, toward a closer to medium-term reality than had been recently thought possible.
The Charts
Readers will see that IONQ is breaking out of a large pennant formation on Wednesday. The key for today will be whether the stock can take and hold its 200-day simple moving average. That would signify increased professional participation and an acceptance that this new narrative will find footing. A $45 handle is kind of expensive from a risk / reward perspective. The other quantum names are all up on this news as well and I think that maybe one of them bearings a better technical setup.
Check out this well-developed “double bottom” pattern of bullish reversal that the chart of D-Wave Quantum ($QBTS) is sporting.
By later today, this chart will likely also have a more bullish looking daily moving average convergence divergence and the stock may take its 50-day simple moving average. These two names may both be worthy of speculation. I don’t think I want to reach for IONQ at this morning’s prices. QBTS though, I admit that I may get long this one.
At the time of publication, Guilfoyle was long IBM equity.
