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IBM to Develop Quantum Technology Utilizing Cloud Platform

Zacks Equity Research

International Business Machines Corporation IBM recently announced a new quantum computing milestone at the Second Post-Quantum Cryptography Standardization Conference held by the National Institute of Standards and Technology (NIST).

The company plans to introduce quantum-safe cryptography and services in the commercial space by 2020. It will leverage its IBM Cloud platform to deliver these systems and services.

The move aims to provide the highest level of security to protect client data and privacy. Quantum computers can solve highly complex tasks and are apt for experimental computing operations for stability, reliability and continuous scientific commercial use.

Notably, the company is currently providing Quantum Risk Assessment from IBM Security that includes the methods and processes to help customers manage risks and capitalize on potential opportunities for accomplishing their overall objectives in the quantum world. By identifying and proactively addressing probable risks and opportunities, IBM is striving to protect data to create customers’ value.

We note that this is an industry-first initiative undertaken by the technology giant and could revolutionize the way computing is being carried out at present. Presently, users have implemented more than 28 million experiments and simulation on the quantum cloud platform.

Per Harish Grama, the general manager of IBM Cloud, "IBM Cloud is taking the critical steps needed to help enterprises ensure their data stays secure in a quantum future."

Notably, IBM’s stock has returned 18.2% on a year-to-date basis, outperforming the industry’s growth of 17.6%.



Quantum Computing Growth Prospects

Quantum computing has its applications in many fields such as AI, financial services, cloud security, drug discovery, and supply chain and logistics.

IBM is striving to enhance the efficiency of its quantum computing systems and services. With quantum computing initiatives, the company attempts to aid enterprises in accelerating difficult financial and technical problems in real time.

Cognitive systems such as IBM Watson run on classical computers and are capable of finding patterns and insights by deciphering a huge amount of data. However, in the absence of any such recognizable patterns, these systems are not of much use.

This is where quantum computers come into play, as they are capable of providing solutions to problems where recognizable patterns do not exist.

The Quantum system has the capabilities to provide highest level of security and opportunities to enhance security for data both on-premises and in the cloud.

Per BCC Research data, global quantum computing market is projected to witness a CAGR of 37.3% through 2022 to reach approximately $161 million. Further, beyond 2022, the report states that the market will witness a CAGR of around 53% to reach $1.3 billion in 2027.

Last Words

IBM’s latest move to showcase “fault-tolerant quantum computers" reflects its ambition to aggressively strengthen foothold in the AI and ML space, and provide security against cyber threats to clients in the Quantum Computing world.

Initiatives to realize quantum supremacy goals at hardware, software and integrated levels hold promises.

Zacks Rank & Stocks to Consider

IBM currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Alibaba Group Holding Limited BABA, Chegg CHGG and Anixter International AXE. All three stocks presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rates for Alibaba, Chegg and Anixter are currently pegged at 15.5%, 28% and 8%, respectively.

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