Why to Bet on Quantum Computing ETFs Now

Quantum computing – still an early-stage technology – has been making headlines due to its potential to dramatically accelerate computing power and unlock massive long-term growth.

Note that AI’s rapid growth is straining energy and water resources, especially with the expansion of data centers needed to power the technology.

However, emerging quantum technologies could improve efficiency and reduce energy use, with real-world applications expected as early as 2028, per McKinsey.

No wonder,the Defiance Quantum ETF QTUM has surged about 80% over the past year and roughly 26% in the past month. The fund houses stocks like Teradyne Inc TER (up about 70% this year, at the time of writing on May 5, 2026), Tower Semiconductor Ltd TSEM (up about 85%) and Nokia Oyj NOK (up 107%)

Momentum Building Across the Industry

A fresh wave of breakthroughs, rising corporate spending and growing commercialization momentum are fueling the space. At the same time, governments are ramping up funding. Governments have committed a cumulative $42 billion to quantum projects as of 2024, noted McKinsey.

The United States, China and Europe continue to invest billions into quantum research, while tech leaders race to achieve “quantum advantage.” China led global quantum technology investment with $17.6 billion as of 2024, while U.S. companies dominated investments in quantum computing, per CNBC.

Breakthroughs Fueling Market Excitement

Quantum stocks rallied sharply in recent days, driven by excitement around NVIDIA’s NVDA new open-source AI models aimed at advancing quantum computing, as quoted on CNBC. The chip giant’s push into open-source AI models has acted as a catalyst for the broader ecosystem. These advancements are narrowing the gap between classical and quantum systems—a needed step toward commercialization.

Quantum computing can transform the chemicals industry by enabling advanced simulations, faster R&D, and optimized operations—unlocking an estimated $200–$500 billion value by 2035, per McKinsey.

In the near term, hybrid models combining classical computing, AI/ML, and quantum systems will drive the most impact, with QC tackling complex chemical behaviors beyond classical limits.

Big Tech and Institutional Push

Major players like Microsoft MSFT, Alphabet GOOGL, Amazon AMZN and IBM IBM are investing aggressively. IBM aims to build a fault-tolerant quantum computer by 2029. Meanwhile, IonQ IONQ recently connected two remote quantum systems and secured a contract with the Defense Advanced Research Projects Agency—marking a key technical and commercial milestone.

Growth Path 

Recent progress in quantum error correction – critical for building reliable machines – has strengthened confidence in the technology, as quoted on CNBC. Advances in qubit counts are also enabling more complex and stable computations.

Practical quantum advantage is expected around 2028-2029, with wider commercial use in the 2030s, Velu Sinha, partner, Bain & Company, told CNBC. According to Bain & Company, the total addressable market could reach $100–$250 billion at maturity, as mentioned on the same CNBC source.

Quantum computing is rapidly advancing from theoretical research to commercialization, with the market projected to grow from $1.1 billion in 2024 to over $18 billion by 2034, per McKinsey.

Quantum’s Varied Usages

Quantum computing can transform the chemicals industry by enabling advanced simulations, faster R&D, and optimized operations – unlocking an estimated $200–$500 billion value by 2035, per McKinsey.

In the near term, hybrid models combining classical computing, AI/ML, and quantum systems will drive the most impact, with QC tackling complex chemical behaviors beyond classical limits.

Volatility Remains a Key Risk

Despite strong momentum, the sector remains small and highly volatile. Many quantum stocks have offered downbeat performance this year, underscoring the speculative nature of the theme.

ETFs Provide Diversified Exposure

Given the risks tied to individual stocks, ETFs offer a more balanced way to invest in quantum computing. Funds like the Defiance Quantum ETF (QTUM) and the Global X AI Semiconductor & Quantum ETF CHPX provide diversified exposure across the ecosystem.

These ETFs include pure-play quantum firms, semiconductor companies enabling quantum hardware, and cloud/AI leaders supporting development. CHPX is up about 48.3% year to date, while QTUM has gained roughly 23.9% in the same period.

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This article originally published on Zacks Investment Research (zacks.com).

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