Quantum Computing will Turbocharge Innovation and Productivity

by
Leo Wealth

Christos Charalambous, CFA

Quantum represents the next frontier of computing. It is a field of computing that utilizes principles from quantum mechanics to perform multiple operations on data and it allows for the simultaneous exploration of multiple solutions. Unlike classical computers, quantum computers can solve certain complex problems much faster than classical computers. For example, Google has built a quantum computer that is about 158 million times faster than the world’s fastest supercomputer. Other quantum computing leaders include companies such as IBM, Amazon, and Microsoft. McKinsey has estimated that 5,000 quantum computers will be operational by 2030. While quantum computing is still in its initial stages of adoption, the long-term implications for scientific innovation and economic productivity are profound.

Quantum computing is opening new possibilities for scientific experimentation, as it is much faster at modeling complex scenarios. This speed boost could lead to significant breakthroughs in areas such as drug discovery, materials, and climate science. Other areas of interest include the optimization of supply chains, energy distribution and food production practices. According to McKinsey, automotive-chemicals-financial services-life sciences are four industries that are likely to see the earliest economic impact from quantum computing. Quantum computing can also serve as a better ‘engine’ for artificial intelligence. The opportunities at the convergence of artificial intelligence and quantum computing will likely be significant. As such, from an economic perspective, quantum computing will likely boost productivity, efficiency trends, and company competitiveness on a global scale. In conclusion, as with artificial intelligence, the quantum era is bound to arrive. Its impact will be transformational for scientific innovation, economic productivity and the development of new products and services. From a long-term investment perspective, U.S. corporations could become even more competitive on a global scale. This scenario bodes well for long-term U.S. equity valuations and relative valuation premia vs. their global peers, especially as increased productivity acts as a supporting factor for U.S. corporate profit margins and earnings growth.


DISCLOSURES

The information provided is for educational purposes only. The views expressed here are those of the author and may not represent the views of Leo Wealth. Neither Leo Wealth nor the author makes any warranty or representation as to this information’s accuracy, completeness, or reliability. Please be advised that this content may contain errors, is subject to revision at all times, and should not be relied upon for any purpose. Under no circumstances shall Leo Wealth be liable to you or anyone else for damage stemming from the use or misuse of this information. Neither Leo Wealth nor the author offers legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

This material represents an assessment of the market and economic environment at a specific point in time. It is not intended to be a forecast of future events or a guarantee of future results.

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