International Business Machines (IBM) unveiled a new quantum computing chip and machine on Monday, envisioning them as foundational elements for much larger systems in the next decade.
The company’s stock rose to $162.77 in early trading, but later gave up the gains.
The race to perfect quantum computing, which relies on quantum mechanics to reach significantly faster computing speeds than classic silicon-based computers, involves companies like Microsoft, Google, Baidu, various startups, and even governments. The challenge is in developing quantum computers that are reliable enough to beat conventional computers.
A Microsoft quantum supercomputer might be a reality in the next 10 years, according to the company’s VP Krysta Svore, while Google’s quantum lab aims to get its first quantum supercomputer up and running by the end of this decade, according to lab founder Hatmut Neven’s recent interview with CBS.
Overcoming challenges related to real-world reliability and minimizing data errors has been crucial. IBM introduced a novel approach to connect chips and machines, coupled with a new error-correction code, aiming to produce compelling quantum machines by 2033.
The initial machine utilizing these advancements is Quantum System Two, featuring three "Heron" chips. Dario Gil, IBM’s senior vice president and director of research, anticipates fairly steady progress until 2029, with a significant leap in capabilities thereafter, similar to the rapid advancements seen in AI systems over the past year.
Gil spoke to the Reuters news agency of the new chips:
"You're going to have to tie them together. You're going to have to do many of these things together to be practical about it. Because if not, it's just a paper exercise."
IBM isn’t the only firm targeting machines in the next few years — other players like the startup PsiQuantum, which is working with semiconductor manufacturer GlobalFoundries to make its chips, aim to commercialize quantum machines within the next six years.
Based on a Nasdaq survey of 11 analysts offering 12-month price targets for IBM stock in the last 3 months, the average target price for IBM $152.63 — close to 5% lower than the current trading price of $160.77.
The highest price target in the survey was $179, while the lowest estimate for IBM shares was $130.
At the time of writing on Monday, IBM shares on the NYSE traded slightly lower than the $161 mark, as per MarketWatch data. The IBM stock price remains over 14% up year-to-date (YTD) as of December 4, slightly trailing the benchmark S&P 500 Index, which is up close to 19% YTD.
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