Can IBM's Focus on Quantum Computing be a Key Differentiator?

International Business Machines Corporation IBM continues to push the boundaries of quantum technology to explore solutions to complex problems beyond the reach of classical computing. The company has inked a partnership with Advanced Micro Devices, Inc. AMD to develop scalable, open-source platforms that could redefine the future of computing. The next-generation computing architectures, known as quantum-centric supercomputing, will introduce a new dimension to the realm of quantum computing by enabling users to increase the complexity of algorithms in the quantum hardware. As users seek to achieve quantum advantage — where quantum computers outperform the classical ones — the new quantum-centric supercomputing could pave the way for technological innovations across the quantum ecosystem.

IBM has made significant updates to Qiskit, its widely used quantum software platform. The latest version includes a stable release of Qiskit SDK v1.x, which offers improved capabilities for building, optimizing and visualizing quantum circuits. The Qiskit Transpiler Service leverages artificial intelligence (AI) to optimize quantum circuits, making them 39 times faster and reducing memory usage threefold compared to previous versions. This AI-powered optimization, combined with heuristic techniques, significantly reduces circuit depth, enhancing overall performance. 

IBM’s Qiskit stack features a range of services tailored to various user needs. The Qiskit Runtime Service simplifies the execution of quantum circuits, while the Qiskit Code Assistant, powered by watsonx-based generative AI models, automates the development of quantum code. Additionally, the Qiskit Serverless tool facilitates quantum-centric supercomputing workloads across both quantum and classical hardware. These enhancements provide IBM Quantum Network members with the most advanced tools to discover new quantum algorithms.

Some Tech Firms Operating in Quantum Computing

Qualcomm Incorporated QCOM plays an adjacent role in the quantum computing ecosystem, leveraging its expertise in semiconductors, wireless technologies and advanced chip design. Qualcomm has been exploring cryogenic CMOS (Complementary Metal-Oxide-Semiconductor) circuits and low-power semiconductors, which can be used in quantum control systems for operating at extremely low temperatures. In addition, Qualcomm’s key expertise in distributed quantum processing and secure communications facilitates a seamless quantum computing workflow.

NVIDIA Corporation NVDA operates as a picks-and-shovels player in the quantum computing space, supplying the infrastructure (GPUs, SDKs, software frameworks) needed to scale and commercialize quantum computing. NVIDIA GPUs are used to simulate quantum systems on classical supercomputers, helping researchers test quantum algorithms and error-correction schemes before deploying them on actual quantum hardware. Moreover, NVIDIA’s GPUs are used to promote a quantum-AI workflow, enabling quantum computers to handle hard optimization/simulation and GPUs to handle machine learning layers.

IBM’s Price Performance, Valuation and Estimates

IBM has surged 21.1% over the past year compared with the industry’s growth of 26.4%.

From a valuation standpoint, IBM trades at a forward price-to-sales ratio of 3.5, below the industry.

The Zacks Consensus Estimate for IBM’s earnings for 2025 has been on the rise over the past 30 days.

IBM currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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