[DigitalToday reporter Jinju Hong] Swiss investment bank UBS assessed that quantum computing could define the next chapter of the technology sector.

On Jan. 19, local time, blockchain media outlet Cryptopolitan reported that an 11-member team led by UBS analyst Madeline Jenkins projected in a 103-page report that quantum computing would have the biggest impact in three areas: molecular simulation, optimisation and artificial intelligence (AI), and cryptography. With technology stocks already facing concerns about overvaluation, the report said quantum computing is emerging as a next-generation growth driver.

As recent technical advances become more visible and Wall Street interest expands in earnest, UBS named IBM, Alphabet (Google) and Microsoft (MS) as companies that will lead practical quantum computing. Over the past year, IBM, Alphabet and MS have accelerated development of quantum systems usable in practice, moving beyond the laboratory level, and have drawn market attention. By contrast, pure-play quantum computing firms such as IonQ have repeated sharp rises and falls in their share prices, showing the market is still at an early stage, UBS said.

UBS said quantum computing has the potential to solve problems that existing computers cannot. It said quantum computing could deliver overwhelming computing power compared with existing systems by using the properties of ultra-small particles, and it expected the technology to enter a commercialisation phase in the 2030s. To implement the same computing performance with existing hardware would require 10^21 GPUs, but UBS estimated a quantum system could do so at a cost in the tens of millions of dollars.

In approaches to implementing qubits, the basic unit of quantum information, superconducting qubits and trapped-ion qubits were assessed as the leading technologies at present. Alphabet and IBM are focusing on superconducting qubits, while MS and Amazon provide various quantum access approaches based on the cloud.

In particular, UBS assessed that Google, a unit of Alphabet, holds a leading position in quantum software and error-correction technology. Google's Willow chip, unveiled in December 2024, succeeded in reducing errors as the number of qubits increased, and processed within five minutes a standard benchmark task that would take about 10 haeyears on existing supercomputers.

MS and Amazon are taking a more flexible strategy. MS is working with smaller hardware firms such as IonQ, while also researching an in-house topological design that could provide faster and more stable qubits if successful. UBS assessed that, if the design succeeds, it could provide faster and more stable qubits. Amazon also supports various quantum computing approaches through its cloud platform. On its investment view, UBS rated MS, Amazon and IBM as "buy" and Alphabet as "neutral".

Meanwhile, listed companies specialised in quantum computing, such as IonQ, D-Wave Quantum and Rigetti Computing, are showing high volatility with repeated sharp rises and falls. Among them, IonQ is the largest, with a market capitalisation of more than $17 billion, but its share price rose 72 percent over the past 12 months and then fell 34 percent since mid-October. Based on FactSet, IonQ's adjusted beta is 2.37, indicating more than twice the volatility of the broader market.

UBS said the trend shows quantum computing is a market that has only just entered the early stage of growth, while over the long term it is highly likely that a small number of technology-leading companies will take the initiative.