There was a time when the quantum computing investment thesis was more hype than anything. That was enough to tempt some retail investors for a while. However, markets eventually graduated to the “show me” stage. That put a burden on listed quantum computing companies to deliver tangible results.
Signs of progress are emerging, including the U.S. government recently announcing it will dole out $2 billion to nine companies in this industry. That confirms the U.S. views quantum computing as a critical industry in which it wants to lead — and that it’s willing to finance that objective.
The WisdomTree Artificial Intelligence and Innovation Fund (WQTM), which debuted last October, benefited from that announcement. The ETF is higher by nearly 13% over the past month. Some of its holdings, including International Business Machines (IBM), are among the companies enjoy Uncle Sam’s quantum spoils. While that’s a credible catalyst, it’s not the only reason WQTM merits consideration by tactical technology investors.
When Purity Matters, Consider WQTM
Considering the relative youth of the quantum computing investment thesis, advisors and investors have a decent number of ETFs, including WQTM, from which to choose. However, the WisdomTree ETF stands out because of its emphasis on quantum computing purity.
Many of its holdings can be considered pure-play quantum stocks, or close to it. Some of the other ETFs in the category, meanwhile, allocate heavily to larger tech companies, with small exposure to quantum computing.
Take, for example, the pure quantum name IonQ (IONQ), WQTM’s third-largest holding. That company is about two months removed from a marquee milestone, it announced on World Quantum Day.
“By linking two commercial trapped-ion systems via quantum entanglement, IonQ demonstrated that its platform can participate in distributed, modular quantum computing, the design pattern that most serious roadmaps require at scale,” noted WisdomTree’s Christopher Gannatti. “The quantum memory technology enabling that link, fabricated from synthetic diamond, came through IonQ’s 2024 acquisition of Lightsynq.”
Rigetti Computing (RGTI), WQTM’s second-largest component, is another example of a pure-play quantum name, with bellwether status in the group. In revenue terms, this is an early-stage company. If it makes progress on superconducting chiplets, though, it could be a key driver of long-term upside for WQTM.
D-Wave Quantum (QBTS), Infleqtion (INFQ), and Xanadu Quantum (XNDU), which combine for more than 11% of the WQTM roster, were also among the stocks with quantum purity mentioned by Gannatti in a recent note.
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