A future quantum computer could potentially solve problems that are essentially impossible for even the most powerful supercomputer. The magic comes from the nature of quantum physics. While traditional computers operate on bits that can be in only one of two states, a quantum qubit is probabilistic, occupying some combination of those two states. This property opens the door to exponentially faster computations.
Today's quantum computers generally aren't capable of solving real-world problems quicker than traditional computers. They are capable of performing some types of computations faster, but these computations are more toy problems than anything else. When Alphabet's Google unveiled its Willow quantum chip last year, it claimed that Willow could perform a particular benchmark in five minutes that would take a supercomputer 10 septillion years. Unfortunately, that benchmark has no known real-world applications.
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Another problem is error correction. Qubits are fragile, and errors are inevitably introduced over the course of a computation. Those errors must be prevented, corrected, or otherwise mitigated for long enough for a computation to be completed.
Microsoft made some noise on this front earlier this year with its Majorana 1 quantum chip, which uses exotic particles to create more robust qubits. However, the company is in the early stages of scaling this technology, and it could very well be many years before anything useful comes out of it.
International Business Machines (IBM +2.22%), a quantum computing pioneer, now sees a path to full-scale quantum error correction by 2029 and true quantum advantage by the end of 2026. The company has a clear roadmap, and if it can deliver, quantum computing could turn into a major business for the century-old tech giant.
The path to fault-tolerant quantum computers
IBM is taking a modular approach on its path to the holy grail of quantum computing. This year, IBM will release Nighthawk, its new quantum process with 120 qubits and 5,000 quantum gates. Over the next few years, successive versions of Nighthawk will increase the number of gates, culminating in 2028 with a 15,000-gate version that can be linked together in groups of nine. IBM believes Nighthawk will be able to achieve true quantum advantage.
Nighthawk is a stepping stone toward Starling, the fault-tolerant quantum computer planned for 2028. To build Starling, IBM will release three iterations of quantum chips over the next few years that include the necessary technology to make Starling a reality.
IBM Quantum Loon comes this year, featuring greater connectivity than the company's current quantum chips. IBM Quantum Kookaburra comes in 2026, bringing the ability to store information and process it with an attached processing unit. And IBM Quantum Cockatoo is set for 2027, allowing entanglement between modules. Starling, which will feature 200 logical qubits and 100 million quantum gates, will be built in 2028 and deliver fault-tolerance by 2029, according to IBM's roadmap.
NYSE: IBM
Key Data Points
A quantum computing leader
Plenty of companies are racing toward viable quantum computing, but IBM has two things that make it unique: a decades-long track record researching and building quantum computers, and a clear roadmap to reach fault-tolerance and true quantum advantage.
While it's impossible to predict how large of an opportunity quantum computing could be for IBM, one estimate puts the economic value generated by quantum computing at $850 billion by 2040, with the market for quantum hardware and software potentially worth $170 billion. If IBM can truly pull ahead of its rivals and deliver real-world results with its quantum computers by the end of the decade, it will be in a great position to reap the rewards of the quantum computing revolution.
IBM's valuation today looks reasonable considering the enormous potential of quantum computing. Based on the company's outlook for 2025, IBM stock trades for roughly 19 times free cash flow. While the stock isn't as cheap as it was a few years ago, IBM still looks like a solid buy. The company's hybrid cloud and artificial intelligence (AI) businesses are driving growth today, and quantum computing has the potential to drive growth in the 2030s and beyond.
