Recently, quantum computing technology has frequently appeared in investors' discussions, and has become a cutting-edge technology field that has received much attention after artificial intelligence. Morgan Stanley analysts Edward Stanley and Matias Ovrum thoroughly analyzed the development status of quantum computing and its potential impact on financial markets in the newly released research report, providing investors with valuable insight.

They believe that quantum computing is still in a very early stage; it is not mature enough in terms of technology and policy; the interest of enterprises, investors, and the public in quantum computing is far lower than artificial intelligence, and the stock price performance of listed pure quantum computing companies is not ideal.

Why is quantum computing attracting attention?

At the beginning of the report, analysts said that in more than half of the industry conferences they have participated in recently, they will be asked questions related to quantum computing. They believe that quantum computing has aroused strong interest among investors for the following main reasons:

First, from a technical perspective, the industry has recently made major breakthroughs in qubit stability and scalability, and governments have also increased financial support for quantum computing startups.

Second, after the boom in investment in the field of artificial intelligence, investors are looking for the next technological frontier that could bring huge returns.

This is particularly important because quantum computing poses a potential threat to the currently booming artificial intelligence industry:

(1) The risks of current encryption technology threaten traditional network security systems;

(2) Enterprise R&D resources are reallocated and are no longer used for artificial intelligence;

(3) Increased competition in hardware and software breakthroughs may challenge AI market leaders and squeeze the profits of existing enterprises;

(4) If large-scale breakthroughs occur before AI infrastructure construction has a significant return on investment, people will worry about the risk that huge AI spending will become obsolete.

These risk factors have raised concerns in the market that the AI industry may face disruptive changes.

The actual development of quantum computing is still in a relatively early stage

Although quantum computing has sparked widespread discussion, its actual development is still in a relatively early stage.

Analysts pointed out that although investors' attention to quantum computing has increased, it is still far lower than in the field of artificial intelligence. Public interest in quantum computing has also increased, but it is still at a low level compared to artificial intelligence, at only about 6% of the latter. The frequency with which companies mention quantum computing in financial reports and documents has increased, but the base is still low.

In terms of capital market performance, the market value of pure quantum computing listed companies declined sharply after peaking in the third quarter of 2023, with a drop of more than 50%. This indicates that investors' enthusiasm for quantum computing may have cooled down, or reflect lower expectations for commercialization in the short term.

Despite this, interest in quantum computing remains strong in the venture capital market. Against the backdrop of the overall venture capital market shrinking by more than 60%, financing in the quantum computing sector fell only slightly by about 25%. Notably, the share of European startups in global quantum computing financing has risen to more than 50%, indicating that the region's competitiveness in this field is increasing.

What is more remarkable is that strategic investors' interest in quantum computing has increased markedly, and the cumulative investment has exceeded 2 billion US dollars. Among them, Microsoft and Google are the most active strategic investors in the past three years:

According to Pitchbook data, Microsoft and Google are the only leading companies to venture into quantum technology for the past three years. However, as cumulative funding from strategic investors has surpassed $2 billion, the need for open market investors to begin to pay attention to this emerging vertical is growing.

For quantum computing to become a mainstream investment theme, it may also require major policy changes or the launch of breakthrough products

Despite this, the Morgan Stanley report notes that quantum computing has yet to become a mainstream investment theme. Compared to popular topics such as artificial intelligence, quantum computing's performance in the open market is relatively lackluster. According to the report, for quantum computing to become a mainstream investment theme, major policy changes or the launch of breakthrough products may be needed.

For financial markets, the development of quantum computing brings both opportunities and risks. On the one hand, quantum computing may revolutionize certain industries and create new investment opportunities; on the other hand, it may pose a disruptive threat to existing technologies and companies, particularly in the cryptocurrency and cybersecurity sector. Furthermore, a major breakthrough in quantum computing could affect the current return on large-scale investment in artificial intelligence infrastructure.

Overall, quantum computing technology is developing rapidly, but it is still a long way from large-scale commercial application. Investors need to carefully assess relevant risks and opportunities and keep a close eye on long-term trends. Although quantum computing may be the next disruptive technology, it may be difficult to replicate the investment boom in artificial intelligence in the short term. For forward-thinking investors, now may be a good time to start watching and understanding this field and prepare for possible future investment opportunities.