Don't be a raccoon investor.
Raccoons can't resist anything that sparkles. They spot a glint in the mud and shuffle toward it as if they've stumbled on buried treasure.
These days, the glittering thing pulling raccoon investors in is quantum computing.
Quantum grabbed attention this week after President Trump put his name to two fresh executive orders. The first tells federal agencies to help bring a genuinely useful quantum computer to life by 2028. The second urges the government to shield its systems against the quantum-powered attacks that may come.
That follows the $2 billion in funding grants the White House handed to nine American quantum computing firms back in May.
All of this is perfectly good news and will move the science along. But it isn't a green light to start buying quantum computing shares.
Quantum, at this stage, is overhyped. The first truly great quantum computing company likely doesn't even exist yet.
The reason I'm raising this today is that I keep seeing investors pulled away from the real prize. During ordinary stretches, that kind of drift might set them back a few thousand dollars.
But this is no time to let artificial intelligence (AI) slip out of focus. Depending on how big your portfolio is, the stakes run into the millions.
The right small AI names are printing cash. Windows like this are rare.
Make no mistake. I'm a believer in quantum computing.
It's genuine science. Down the road, it could help us engineer better medicines… uncover new materials… fine-tune tangled systems… and crack problems that stump even the mightiest supercomputers we have today.
But "one day" is the key phrase.
A genuinely useful quantum computer remains years out. A decade or more, in all likelihood.
Where your laptop reasons in bits, quantum machines work in qubits. The largest superconducting chip from IBM (IBM) holds 1,121 qubits. Atom Computing has built a machine with 1,225.
Impressive stuff, sure. But pulling off something commercially valuable at scale — breaking today's encryption, say, or modeling intricate drug molecules — probably calls for somewhere between 100,000 and several million functioning qubits.
Errors are another headache. Qubits are astonishingly delicate. Heat, vibration, radiation, and the faintest disturbances can throw them off.
So quantum machines have to carry a heap of spare qubits whose only job is catching and fixing mistakes.
Then there's the matter of speed. For the bulk of routine work, ordinary computers still win the race. And once you factor in all the error-correction overhead, one quantum step can fall far behind a single step on a conventional machine.
Right now, quantum computers are niche tools built for niche problems. Possibly era-defining problems, true. But they aren't about to take over your laptop, handle your inbox, or push GPUs out of AI data centers any time soon.
Quantum stocks aren't getting a dollar from me.
IONQ Inc. (IONQ:NASDAQ) carries a market value of nearly $20 billion. D-Wave Quantum Inc. (QBTS:NYSE) sits around $8.5 billion, and Rigetti Computing (RGTI:NASDAQ) comes in at roughly $6.5 billion. Quantum Computing (QUBT:NASDAQ) has cleared $2 billion.
Stack them together, and these four add up to about $37 billion.
That figure would add up if quantum computing were a big, rapidly expanding commercial business. It isn't. By Grand View Research's count, the whole global quantum computing market pulled in a mere $1.6 billion in revenue last year.
And a good chunk of that isn't "useful quantum computers solving useful problems." It's largely consulting, research deals, government money, and early tinkering.
Put differently, public quantum shares are valued as though the commercial breakthrough is right around the corner.
Listen, nobody gets a bigger thrill than I do when technology and business join forces on a breakthrough that lifts millions of lives. That's the moment stocks take off.
You'll hear it from me first on the day that arrives for quantum. Today isn't that day.
So instead…
FOCUS!
On AI.
Maybe a bit of this is me seeing myself in the mirror. Back when I was younger, I was a raccoon investor through and through. My curiosity runs deep, and I always itched to chase down the next great breakthrough.
That curiosity hasn't faded, but these days I aim it elsewhere. My returns climbed once I trained myself to lock onto the megatrend that actually matters.
And AI is, beyond any doubt, the megatrend that matters now.
If you'd like to see where the largest AI opportunities are heading next, come join me in The Jolt.
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