Although there’s still plenty of evolution and growth to be had with artificial intelligence (AI) and much more progress to be made on that frontier, many investors cannot help but ponder what the next significant disruptive technology will be.
The answer isn’t yet known. It’s possible there are multiple answers, but eager investors have ascribed considerable hope and optimism to quantum computing. There have already been extended rallies in quantum computing stocks. This has been followed by deep pullbacks, underscoring the point that stock-picking in an arena involving an unproven technology is, to say the least, difficult.
The WisdomTree Quantum Computing Fund (WQTM) can ease that burden. WQTM, which debuted last year, could be a credible consideration for investors seeking quantum computing exposure because single-stock risk is elevated in this industry due to a lack of tangible products and some companies’ inability to cobble together steady revenue, let alone profits. Indeed, those are negatives and risks, but quantum computing is a potential-rich investment concept.
“Quantum computing promises to be one of the most transformative technological developments of the next few decades, but Morningstar’s analysts caution that mainstream market adoption could be a long way off,” says Morningstar’s Sarah Hansen.
WQTM Offers Advantages
One of the most noticeable perks of WQTM is that, while the ETF is home to many widely known quantum computing stocks, some of that risk is offset by exposure to more traditional tech names that may prove to be “quantum adjacent.”
For example, Intel (INTC), Alphabet (GOOGL), Nvidia (NVDA), Amazon (AMZN), and International Business Machines (IBM) are among the ETF’s top 10 holdings. Microsoft (MSFT) is another example of a diverse, trusted, mega-cap tech name found on the WQTM roster.
Among others, those exposures highlight at least two points. First, WQTM is a quantum computing ETF with inroads to other fast-growing technologies, including AI. Second, the universe of pure-play publicly traded quantum computing companies is sparse and still difficult to select individual securities.
Those are benefits investors should consider, because the quantum computing investment opportunity it offers matches the risk.
“Maybe the meme nature of some of those certainly can artificially pump up the price. And maybe you can do great. But it won’t be based on any fundamentals, I don’t think,” says Morningstar’s Dan Romanoff. “And so you need to be patient and be investing for the long term if you want to do anything in quantum right now. But you should keep in the back of your mind also that this probably is going to be real and pretty meaningful eventually.”
This article was prepared as part of WisdomTree’s general paid sponsorship of VettaFi | ETF Trends. This specific content within and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional.
WisdomTree is an independent company, unaffiliated with VettaFi | ETF Trends. WisdomTree has not been involved with the preparation of the content supplied by VettaFi | ETF Trends. It does not guarantee or assume any responsibility for its content.
For more news, information, and analysis, visit the Modern Alpha Content Hub.
