Quantum leaping into 2025

Hey Superheroes,

Happy New Year!

Did you know the S&P 500 closed at a record-high 57 times last year? It ended the year up 23% – impressive, especially given that it notched a 24% gain the year before. In fact, 2023-2024 marked the S&P 500’s largest consecutive two-year gain of the century so far. We made history! 

Now it’s only the third day of the year but we’re starting to see a new investment trend shaping up across the markets: Quantum Computing. 

Quantum Computing shares surged through the new year

If Google caused a spark, Rigetti lit the fire.

Thanks to Google’s recent unveiling of its new quantum chip, “Willow”, investors are all over news around quantum computing.

How timely is it then that Rigetti Computing (RGTI.US) also posted news around a successful partnership on the same day as Google’s announcement and even launched a new system in late-December?

Well, timely enough to ride the momentum. Let’s take a look at what’s been happening.

🍟 What is Rigetti Computing?

Founded in 2013 by a physicist who previously worked at IBM, the company operates as a “full-stack quantum computing” business. 

This means Rigetti handles everything from designing and manufacturing quantum chips, to developing the software programmers need to use them.

⚛️ 1,000 qubits?!

Now here’s where Rigetti got investors excited. 

When it raised funds to go public in 2021, it aimed to use the capital to scale its quantum processors. Indeed, Rigetti had a lofty goal of going from 80 qubits to 1,000 qubits by 2024, to a massive 4,000 qubits by 2026.

However, fast forward to 2025 and it looks like Rigetti was a bit too ambitious. The news it released two weeks ago was about its new 84-qubit system, “Ankaa-3” – a far cry from 1,000 qubits.

Despite that, it’s the story that sent its shares soaring. Rigetti’s share price is now up 562% over the last month alone.

🌊 The sector riding the wave

It’s not just Rigetti seeing a surge either. Other participants in the sector also saw some massive gains over the last month:

• D-Wave Quantum (QBTS.US): +248%
• Quantum Computing (QUBT.US): +207%
• IONQ (IONQ.US): +33%

Defiance Quantum ETF (QTUM.US), the only existing thematic ETF that offers quantum computing exposure, is also up 16.7% over the past month. 

🤔 So… is Ankaa-3 a game changer?

While there’s undeniably a lot of excitement around Rigetti’s new system, how does it actually compare to the biggest name in the market? 

Well, Google’s Willow boasted 105 qubits, higher than Ankaa-3’s 84 qubit system. Additionally, Willow can maintain its quantum state (i.e. before errors happen) an average of 81 microseconds, much longer than Ankaa-3’s 21 microseconds. Not just that, Google’s Willow also posted lower error rates than Rigetti’s Ankaa-3.

Now we’re obviously not experts here, and Ankaa-3 may have other technical/scientific areas that lets it put a leg up over Willow, but these key numbers seem to show that Google is still a step ahead.

But then again, it’s impressive effort for a company worth just 0.2% (US$4.85 billion) of Google’s market cap (US$2.3 trillion).

🔦  Some other things we’re shining the Spotlight on:

IT WASN’T THE TESLA: News of Tesla’s Cybertruck explosion may have been a factor that rocked Tesla’s share price this week, but it was later discovered that it was self-induced by the car’s driver. At the same time that was cleared up however, Tesla reported its first full-year sales slump in over a decade.

WARREN’S SHOPPING SPREE: After months of holding a record amount of cash, Warren Buffett’s Berkshire Hathaway is finally making moves. The conglomerate snapped up more shares of Occidental Petroleum, VeriSign and SiriusXM in the last week of 2024. Investors were quick to act, sending the share prices of the first two companies up as soon as Berkshire filed its forms.

MOVING FORWARD: Rio Tinto moved closer to finalizing its $US6.7 billion ($10.7 billion) acquisition of Arcadium Lithium after 98% of shareholders voted in favour of the deal. Pending further regulatory requirements, the deal is expected to happen in mid-2025.

Keep up to date on the markets by following us on Instagram @superheroau!