Quantum computing is lining-up to be the biggest investing opportunity since the innovation of artificial intelligence.
As of December 2024, the quantum computing industry comprises over 700 companies worldwide.
According to Tracxn, there are 726 companies in the quantum computing sector, with 184 based in the United States, 71 in the United Kingdom, and 55 in Germany.
Most investors are just starting to read the basics on quantum computing, let alone figuring out which stocks they should be buying.
Don’t worry, there’s an easier way to get in early on the newest technology movement.
Quantum computing is a revolutionary form of computing that leverages the principles of quantum mechanics to process information in ways that classical computers cannot.
Traditional computers use bits as the smallest unit of data, represented as either 0 or 1. Quantum computers, however, use quantum bits, or qubits, which can exist in multiple states simultaneously due to a property called superposition.
This allows quantum computers to perform many calculations at once, dramatically increasing their processing power for certain tasks.
Quantum computing and artificial intelligence (AI) are different technologies with unique strengths, so one isn’t necessarily better than the other. Instead, they both excel in different areas and can even complement each other one day.
Quantum Computing uses the principles of quantum mechanics to process data in ways that classical computers cannot. Its applications will help solve complex problems in cryptography, optimization, and materials science that traditional computers struggle with.
Artificial Intelligence, on the other hand, focuses on recognizing patterns and learning from data to make predictions.
AI is already widely used in applications like voice assistants, image recognition, and decision-making.
When combined, quantum computing has the potential to enhance AI by speeding up tasks like training machine learning models and analyzing large datasets.
While AI is practical and widely adopted today, quantum computing is still emerging and could one day supercharge AI and revolutionize many industries.
This is why Quantum Computing is a completely new opportunity for investors.
While some investors will want to find and buy the standout quantum computing stocks, most investors will benefit by taking a simpler approach by using an exchange traded fund (ETF).
Enter the Defiance Quantum ETF (QTUM).
The Defiance Quantum ETF is one of the first to focus its investment strategy on quantum computing by researching and buying more than 70 companies in the quantum computing industry.
The fund, originally traded in 2018, has returned 51% for 2024 and is likely to continue with stronger performance in 2025.
Top holdings in the fund include companies like D-Wave Quantum (+975% in 2024), Rigetti Computing (+1548% for 2024) and IonQ Inc (+250% in 2024). The ETF also holds a number of semiconductor, service and software companies that investors are more familiar with.
Top 10 holdings for the ETF are listed below.
Benefits of the QTUM
Investing in an ETF (Exchange-Traded Fund) like the quantum computing ETF offers several benefits.
ETFs provide instant diversification by holding a basket of assets, such as stocks, bonds, or commodities, reducing the risk associated with individual investments.
Most ETFs are cost-effective, with lower expense ratios compared to mutual funds.
ETFs trade like stocks on an exchange, allowing for flexibility in buying and selling throughout the day. Many ETFs track specific indices or sectors, giving investors access to targeted market exposure.
Finally, their transparency ensures you always know what you’re investing in. ETFs are ideal for building a diversified portfolio with simplicity, affordability, and convenience.
The Defiance Quantum ETF has a management fee of 0.40%. According to Morningstar data, that fee is competitive within its category. The low fee places it among the least expensive quintile compared to similar funds.
QTUM Chart and Outlook
Shares of the Defiance Quantum ETF have seen some selling pressure over the last two weeks as the market experiences some weakness. Shares had traded as high as $90 just ahead of the holidays and are now moving towards an $80 price.
From a technical perspective, the ETF’s 50- and 200-day moving averages indicate strong bullish momentum. That technical feature suggests higher prices for the QTUM shares in 2025.
The volume of the ETF has increased dramatically over the last month as new investors gain interest in quantum computing as an investment. While that volume has dropped, the holiday lightened trading is more the cause than any shift in investor interest.
Investors should expect interest and volume to increase on the QTUM shares as 2025 gets to a start. The first two months may see some selling pressure due to market seasonality (market seasonality story here). That aside, any weakness should be viewed as a buying opportunity.
Look for support at the ETF’s $75 price level as considerable consolidation was seen at this price in early December.
A further decline to $70 would draw significant buying interest in the QTUM as this is where the ETFs 50-day moving average is currently priced. A stock or ETF’s 50-day moving average is one of the strongest trendlines for support.
Looking forward, the QTUM shares maintain a long-term bullish outlook with a price target of $125.
