Quantum computing stocks erupted late last year—some doubling or tripling—and are now pulling back. Cris Sheridan tapped Woody Preucil, Senior Managing Director at 13D Research and Strategy, to get an update on what’s happening in the quantum computing space. A long-time bull on quantum tech, Preucil’s tracked its arc with Sheridan for years. “You’ve… laid out the bullish case… over the years,” Sheridan notes, spotlighting 13D’s foresight. Now, with quantum’s promise surging, Preucil sees a breakthrough—and another buying window potentially emerging after last year’s surge. Here’s his take on the tech, the stocks, and what’s next.
Listen to the full audio interview and discussion here: The Quantum Race Heats Up: Google, China, and the Tech Giants
Quantum’s Triple Play
Preucil frames quantum’s scope in three domains: “quantum computing… quantum communications… and quantum sensing.” Computing grabs headlines, but communications—think China’s “unhackable networks”—and sensing, with detectors “up to a thousand times more sensitive” than today’s, round out the triad. Preucil notes that the latest advancement with Google’s Willow chip is “a major inflection point” for scaling universal quantum machines into wider use.
Willow’s Quantum Leap
Willow’s debut stunned. “It demonstrates… computational advantage over classical computers,” Preucil says. In 2019, Google’s Sycamore chip solved a task in three minutes that a supercomputer would churn through for 10,000 years. Willow? It tackled a tougher problem in five minutes—versus 10 septillion years (10 with 25 zeros) for a classical rival. “That’s older than the age of the universe,” he marvels. Qubits, leveraging quantum superposition—“multiple states simultaneously”—fuel this edge, outpacing binary transistors. Sheridan notes multiple news sources saying how this development raised questions about the possible existence of multiple universes. Preucil clarifies: Willow’s speed hints at tapping parallel realities, per Hartmut Neven, founder of Google’s Quantum Artificial Intelligence lab, sparking multiverse debates.
Scaling the Unscalable
The real prize? Scalability. Quantum’s fragile qubits falter under “environmental noise—like if a scientist sneezes,” Preucil quips. Past error fixes flopped, piling on redundant qubits only to hike errors. Willow flips this: “They created an architecture… that can… fix errors faster than they’re generated.” Scaling from 3x3 to 7x7 qubit grids, errors halved each leap—a first. Plus, a 5x boost in coherence (to 100 microseconds) keeps qubits stable longer. “This lays the groundwork for… much more powerful” machines, he says, though the “holy grail” universal quantum computer might be 5-10 years off—or more, per Nvidia’s Jensen Huang.
D-Wave Fires Back
Huang’s caution sparked a dip, but Preucil flags D-Wave’s rebuttal. “His comments were strongly rebutted by… D-Wave,” he notes. Unlike Willow’s universal aim, D-Wave’s annealing machines excel at optimization—think Mercedes-Benz tweaking EV batteries or Mastercard streamlining ops. “They’re already commercialized,” Preucil says, hinting breakthroughs could hit sooner. Sheridan agrees: “We don’t know exactly how long it’s going to be… could be sooner than… people think” as AI is also being applied to solve this problem.
Security’s $3 Trillion Wake-Up
Willow’s power underscores a ticking clock: encryption’s doom. “Quantum systems can bypass… RSA encryption by factoring large numbers instantly,” Preucil warns. A Hudson Institute study pegs a quantum cyberattack’s cost at $3.3 trillion—10-17% of U.S. GDP. NIST’s August 2024 quantum-safe algorithms signal urgency, but “upgrading the world’s IT infrastructure… is going to take years,” he says. Adversaries might already wield such tech in secret, amplifying the race. Sheridan nods: “Something… we need to be preparing for.”
Who’s Leading?
Google’s Willow edges it ahead, Preucil suggests: “You could probably argue that Google is… in the lead now.” But it’s crowded—IBM, Microsoft, D-Wave, Rigetti, IonQ, plus 350 startups. China’s $15 billion quantum push shines in communications and a 504-qubit cloud machine, rivaling Google’s 2019 Sycamore leap. “China is… catching up quickly,” he says. Sheridan recalls D-Wave’s early podcast cameo on Financial Sense, asking, “Are they still in the lead?” Preucil’s response: it’s now a worldwide effort and rivalry, with Google’s latest development a push into new territory, as D-Wave maintains its foothold on practical commercialization.
Quantum Meets AGI
Quantum’s rise parallels AI’s, Sheridan observes: “The current state-of-the-art AI… proto-AGI… alongside… quantum breakthroughs” could be breathtaking. Preucil sees synergy: “The convergence… could… supercharge both fields.” Quantum’s horsepower could slash AI training’s energy guzzle—Microsoft’s 2021 study showed 4,000x speed gains—while AI optimizes quantum code. Sheridan predicts quantum might bridge proto-AGI (like OpenAI’s o3 model or xAI’s Grok) to superintelligence: “It’s likely going to take… quantum computing to move us from AGI [artificial general intelligence] to ASI [artificial superintelligence].” Preucil pegs AGI at 3-8 years, ASI further out.
Stocks: Buy the Dip?
After 100-200% surges, quantum stocks—Rigetti, IonQ, D-Wave—corrected. Preucil believes this is presenting investors another opportunity to gain exposure: “This is still a buying opportunity within a long-term bull market.” The Defiance Quantum ETF (QTUM) is a good place to start research on holdings and leaders in the quantum computing space. However, Preucil said, “Let the dust settle… before… new positions,” but security leaders—SK Telecom (SKM), Cloudflare, FormFactor—shine too. “The global IT cybersecurity infrastructure… is going to have to be reconfigured… huge and… unavoidable,” he says.
Quantum’s Promise
Beyond stocks, quantum tackles big problems—climate, drugs, new materials—Preucil notes in 13D’s latest What I Learned This Week. “There’s a lot of promise to… solve… pressing problems,” he says. Sheridan ties it to AI’s o3 leap, now at 80% on Dr. Alan D. Thompson’s AGI meter: “We’re getting inexorably closer.” Preucil’s tracked this since 2019’s Neven’s Law—quantum’s double-exponential climb—proving foresight pays.
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