Quantum Computing Will Change the World. How to Play the Stocks.
IDC last year estimated that the market for quantum computing services, mostly delivered by the cloud, could grow to $8.6 billion in 2027, up from $412 million in 2020, a compound annual growth rate of more than 50%.
More tantalizing is a 2021 report from Boston Consulting Group that put the potential value creation from quantum computing at $450 billion to $850 billion—with $90 billion to $170 billion of that flowing to the quantum industry players. But investors will have to be patient—Boston Consulting Group doesn’t expect the industry to reach that scale until 2040 or later.
William Zeng, head of quantum research at Goldman Sachs , is fascinated by quantum’s game-changing potential. “We are very much in research mode,” Zeng says. “We do not have systems in production yet. We’re figuring out how to get there. It starts with looking at business problems—what things now are too slow, too expensive, or can’t be solved at all. And then you try to pair those with places where quantum has a theoretical advantage.”
One early area of focus for Goldman is the potential to speed up Monte Carlo calculations, complex algorithms used to assess the value and risks of derivatives and other securities. He sees other potential applications in portfolio optimization and machine learning for anti-money-laundering, among other things. But not yet, and not particularly soon.