New breakthroughs in 2021 bring quantum closer to fulfilling its promise and hope in 2022

2021 may prove to be a breakthrough year for quantum computing stocks, with 2 pure-play quantum computing companies going public, investment rising from both public and private sources, governments recognizing quantum’s strategic importance, and more incidences of quantum showing its value. “2021 may go down in history as an inflection point for the quantum industry,” writes Matt Swayne in the Quantum Insider.1

Quantum stocks demonstrated stability 

2021 saw not one, but two pureplay quantum stocks float on the public stock exchange. First, quantum computing company IonQ concluded a SPAC deal with dMY Technology Group, Inc. III to list on the NYSE2. IonQ floated with a value of over $2 billion and announced that it had tripled its expectations for 2021 total contract bookings from $5 million to $15 million3. Then Rigetti joined it in the same month, with a SPAC deal with Supernova Partners Acquisition Co. II Ltd.4 

The move is widely seen as proof of the stability and long-term potential of quantum. Mike Wheatley, analyst at SiliconAngle, said “By going public, IonQ is showing the world that quantum computing is ready for prime time.5” Quantum Zeitgeist says the Rigetti deal will “take the entire sector out of the darkness of the private equity markets and catapult quantum into the light.6

2021 also brought achievements for other quantum heavyweights. Honeywell’s quantum division merged with Cambridge Quantum to form Quantinuum7, and in December, it announced the first quantum-powered commercial product in the form of an encryption-key generator for secure cryptography8. The UK’s Oxford Quantum Circuits (OQC) launched the country’s first Quantum Computing-as-a-Service in the same month9; Amazon built the AWS Center for Quantum Computing at Caltech10; and IBM revealed its 127-qubit “Eagle” quantum processor, which passes the 100-qubit threshold that is widely believed to be vital for practical quantum computing success11.

Investment in quantum continued to rise

2021 saw more investment in quantum computing stocks than ever before. Quantum computing companies received close to $1.02 billion from venture capitalists in 2021, 68% more than the previous year12, and approximately $3 billion in total private capital.13

Source: https://pitchbook.com/news/articles/quantum-computing-venture-capital-funding

The IDC predicts that investment in quantum computing will continue at a CAGR of 11.3% for the next 6 years, reaching almost $16.4 billion by 2027.14

Quantum became a crucial geopolitical issue

2021 was the year that the quantum penny dropped, and many governments realized that quantum supremacy isn’t just a matter of bragging rights, but a vital issue in geopolitics. Quantum computing underpins every use case of advanced artificial intelligence (AI) and machine learning (ML), with major implications for both economic advancement and military superiority. Hypersonic missiles rely on AI; quantum computers are soon expected to be able to decrypt all of today’s public-key cryptography; and advanced ML enables hyper-accurate facial recognition and GPS tracking for surveillance. 

As a result, rivalry between the US and China jumped even higher, and political support and public investment increased worldwide:

  • China allocated $9.6 million on a National Laboratory for Quantum Information Sciences15
  • The Australia-UK-US pact included a commitment to share quantum advances16
  • The UK announced a £2.4 billion strategy for quantum technologies17 and gave £173 million to create the Hartree National Centre for Digital Innovation (HNCDI)18
  • US President Biden is pushing legislation to contribute $100 billion to emerging technologies such as quantum19
  • Canada announced another $360 million of investment in a National Quantum Strategy20
  • The Netherlands announced €615 million for quantum technology development21
  • France revealed a €1.8 billion five-year investment plan in quantum technologies22
  • New Zealand promised $36.75 million over the next 7.5 years for the Dodd-Walls Centre for Photonic and Quantum Technologies23

Quantum use cases expanded

The quantum technologies sector is entering 2022 with a full swathe of use cases that help encourage investment and political support. Quantum’s impact on anything that uses advanced AI or ML includes manufacturing, materials design, financial fraud, drug development, genomic sequencing, augmented reality (AR) and virtual reality (VR), supply chain management, and more. 

2021 saw Mitsubishi Chemical apply quantum computing to design more efficient lithium-air batteries; JP Morgan Chase and Co IBM to use quantum for financial risk analysis24; and BP use the IBM Q Network to explore ways to reduce carbon emissions and raise operational efficiency25, to give just a few examples. 

The pandemic also added momentum to the application of quantum in healthcare. Quantum-powered genomic sequencing meant that people with rare diseases received accurate diagnosis, and in some cases treatment, in 202126. Predictive healthcare through quantum analysis of data gathered by wearable medical monitors took another giant step forward27. To stay ahead of the curve, Cleveland Clinic signed a 10-year partnership with IBM to apply cloud, AI, and quantum computing to advance health related discoveries.28

2021 saw big strides for two sub-sectors in the quantum market: quantum sensing, which uses sub-atomic “quantum particles” as sensors in gas and oil exploration, surveying construction sites, seismic or weather changes; and quantum secure communications. The quantum sensing market is predicted to exceed the quantum computing market in 2022, and quantum communications is forecast to be worth $3 billion by 2030.29  

Quantum computing isn’t yet commercialized, but 2021 showed that it’s well along the road 

 As Ian Bezek, a hedge fund expert, pointed out, it’s hard to predict value and revenues from quantum when it’s still mostly in potential30. According to Gartner’s Hype Cycle for Computing Infrastructure for 2021, it will take at least 10 years before quantum computing reaches the Plateau of Productivity31, and Deloitte estimates that quantum computing hardware, software, and QC-as-a-service will bring in under $500 million in revenue in 202232.

It’s generally agreed that quantum hasn’t yet matured as a sector. Deloitte’s experts conclude that “Current QCs are roughly where heavier-than-air flight was on December 17, 1903…That said, a little more than a decade later, airplanes were instrumental in World War I, and technology advances faster now than it did then. It’s an open question, however, whether quantum computing will follow the same path.”33

But it’s also generally agreed that significant profits and capabilities are on their way. The IDC describes 2021 as a “pivotal year” in the quantum computing industry and predicts that the momentum will continue in 2022. It forecasts that customer spend on quantum computing will grow from $412 million in 2020 to $8.6 billion in 2027 at a CAGR of 50.9%34, and GMI predicts that the quantum computing market will exceed $5 billion by 2028.35

With so many signs of future success, now could be the time for investors to invest in quantum computing stocks. For people who want to be part of the quantum revolution without trying to select the best quantum computing stocks to buy, a quantum computing ETF like Defiance QTUM offers a way to spread your investment across a number of promising quantum computing companies and mitigate exposure to single stick selection risk.  


1 “2021: The Year’s Top Ten Stories in Quantum Computing and Quantum Technology” December 31, 2021 https://thequantuminsider.com/2021/12/31/2021-the-years-top-ten-stories-in-quantum-computing-and-quantum-technology/ 

2 “IonQ Becomes First Publicly Traded, Pure-Play Quantum Computing Company; Closes Business Combination with dMY Technology Group III” October 1, 2021 https://ionq.com/news/october-01-2021-ionq-listed-on-nyse 

3 “IonQ Becomes First Publicly Traded, Pure-Play Quantum Computing Company; Closes Business Combination with dMY Technology Group III” October 1, 2021 https://finance.yahoo.com/news/ionq-becomes-first-publicly-traded-120000782.html 

4 “Rigetti Computing Announces Plans to Become Publicly Traded via Merger” October 6, 2021 https://www.hpcwire.com/off-the-wire/rigetti-computing-announces-plans-to-become-publicly-traded-via-merger/ 

5 “Quantum computing startup IonQ to make its stock market debut” September 30, 2021 https://siliconangle.com/2021/09/30/quantum-computing-startup-ionq-make-stock-market-debut/ 

6 “Quantum Computing goes public. How the rise of Quantum Computing companies on the Stock market is creating excitement for the entire industry” October 27, 2021 https://quantumzeitgeist.com/quantum-computing-goes-public-how-the-rise-of-quantum-computing-companies-on-the-stock-market-is-creating-excitement-for-the-entire-industry/ 

7 “Cambridge Quantum and Honeywell Reach Planned Milestones on way to making Quantum Computing Mainstream” July 23, 2021 https://quantumzeitgeist.com/cambridge-quantum-and-honeywell-reach-planned-milestones-on-way-to-making-quantum-computing-mainstream/ 

8 “Introducing Quantum Origin” no date, https://www.quantinuum.com/pressrelease/introducing-quantum-origin 

9 “OQC Delivers the UK’s first Quantum Computing as-a-Service” July 7, 2021 https://thequantuminsider.com/2021/07/07/oqc-delivers-the-uks-first-quantum-computing-as-a-service/ 

10 “Caltech and Amazon Partner to Create New Hub of Quantum Computing” October 26, 2021 https://www.caltech.edu/about/news/caltech-and-amazon-partner-to-create-new-hub-of-quantum-computing 

11  “IBM’s Eagle — 127-Qubit Quantum Processor — Takes Flight, Another Step Toward ‘Frictionless’ Quantum in 2025” November 15, 2021 https://thequantuminsider.com/2021/11/15/ibms-eagle-127-qubit-quantum-processor-takes-flight-another-step-toward-frictionless-quantum-in-2025/ 

12 “Quantum computing startups are suddenly raking in millions” October 11, 2021 https://www.techradar.com/news/quantum-computing-startups-are-suddenly-raking-in-millions 

13 “Some of the Biggest Names in Venture Capital Are Buying Into Quantum Startups — And Not Just Financially” November 4, 2021 https://thequantuminsider.com/2021/11/04/some-of-the-biggest-names-in-venture-capital-are-buying-into-quantum-startups-and-not-just-financially/ 

14 “IDC Forecasts Worldwide Quantum Computing Market to Grow to $8.6 Billion in 2027” November 29, 2021 https://www.idc.com/getdoc.jsp?containerId=prUS48414121 

15  “An Australian strategy for the quantum revolution” May 13, 2021 https://www.aspi.org.au/report/australian-strategy-quantum-revolution 

16 “Biden touts ‘strength’ of alliances with UK and Australia as nations announce new pact” September 16, 2021 https://news.yahoo.com/biden-touts-strength-alliances-uk-213255688.html?fr=sycsrp_catchall 

17 “Can the UK become a quantum computing world leader?” https://techmonitor.ai/technology/uk-quantum-computing-strategy-ibm 

18 “New £210 million centre to create jobs of the future with AI and quantum computing” June 4, 2021 https://www.gov.uk/government/news/new-210-million-centre-to-create-jobs-of-the-future-with-ai-and-quantum-computing “UK STFC Hartree Centre and IBM Begin Five-Year, £210 Million Partnership to Accelerate Discovery and Innovation with AI and Quantum Computing” June 3, 2021 https://newsroom.ibm.com/2021-06-03-UK-STFC-Hartree-Centre-and-IBM-Begin-Five-Year,-210-Million-Partnership-to-Accelerate-Discovery-and-Innovation-with-AI-and-Quantum-Computing 

19 “How quantum computing will transform government IT” December 10, 2021 https://gcn.com/emerging-tech/2021/12/how-quantum-computing-will-transform-government-it/316498/ 

20 “National Quantum Strategy Funded in Government of Canada Budget” April 21, 2021 https://qmi.ubc.ca/news/national-quantum-strategy-funded-in-government-of-canada-budget/ 

21 “Quantum Delta NL awarded 615 million euro from Netherlands’ National Growth Fund to accelerate quantum technology” April 9, 2021 https://qutech.nl/2021/04/09/quantum-delta-nl-awarded-615-million-euro-from-netherlands-national-growth-fund-to-accelerate-quantum-technology/?cn-reloaded=1 

22 “Emmanuel Macron veut mettre la France dans le trio de tête mondial des technologies quantiques” January 21, 2021 https://www.lemonde.fr/politique/article/2021/01/21/emmanuel-macron-presente-un-plan-quantique-de-1-8-milliard-d-euros-sur-cinq-ans_6067037_823448.html 

23 “Aotearoa leaps into the second quantum revolution” July 19, 2021 https://www.stuff.co.nz/science/300358358/aotearoa-leaps-into-the-second-quantum-revolution 

24 “QUANTUM COMPUTING IN 2022: A LEAP INTO THE TREMENDOUS FUTURE AHEAD” January 2, 2022  https://www.analyticsinsight.net/quantum-computing-in-2022-a-leap-into-the-tremendous-future-ahead/ 

25 “bp joins the IBM Quantum Network to advance use of quantum computing in energy” February 15, 2021 https://newsroom.ibm.com/2021-02-15-bp-joins-the-IBM-Quantum-Network-to-advance-use-of-quantum-computing-in-energy 

26 “Whole genome sequencing improves diagnosis of rare diseases and shortens diagnostic journeys for patients, according to world first study” November 10, 2021 https://www.prnewswire.com/news-releases/whole-genome-sequencing-improves-diagnosis-of-rare-diseases-and-shortens-diagnostic-journeys-for-patients-according-to-world-first-study-301421310.html 

27 “How Quantum Computing Can Impact the Healthcare Industry” https://mitrai.com/blogs/how-quantum-computing-can-impact-the-healthcare-industry/ 

28 “For Cleveland Clinic, Quantum Is ‘Too Compelling to Ignore’” October 29, 2021 https://deloitte.wsj.com/articles/for-cleveland-clinic-quantum-is-too-compelling-to-ignore-01635526783 

29 “Quantum computing in 2022: Newsful, but how useful?” December 1, 2021 https://www2.deloitte.com/xe/en/insights/industry/technology/technology-media-and-telecom-predictions/2022/future-of-quantum-computing.html 

30 “IonQ Stock: What Is The Forecast For 2022?” December 30, 2021 https://seekingalpha.com/article/4477337-ionq-stock-forecast-2022 

31 “Gartner advises tech leaders to prepare for action as quantum computing spreads” October 21, 2021 https://venturebeat.com/2021/10/21/gartner-advises-tech-leaders-to-prepare-for-action-as-quantum-computing-spreads/ 

32 “Quantum computing in 2022: Newsful, but how useful?” December 1, 2021 https://www2.deloitte.com/xe/en/insights/industry/technology/technology-media-and-telecom-predictions/2022/future-of-quantum-computing.html 

33 “Quantum computing in 2022: Newsful, but how useful?” December 1, 2021 https://www2.deloitte.com/xe/en/insights/industry/technology/technology-media-and-telecom-predictions/2022/future-of-quantum-computing.html 

34 “IDC Forecasts Worldwide Quantum Computing Market to Grow to $8.6 Billion in 2027” November 29, 2021 https://www.idc.com/getdoc.jsp?containerId=prUS48414121 

35 “Quantum Computing Market Size, Growth Forecasts 2028” October 2021 https://www.gminsights.com/pressrelease/quantam-computing-market