This Quantum Computing ETF Could Deliver Multibagger Returns

WisdomTree Quantum Computing Fund (WQTM) focuses on quantum startups with 37 holdings where the top 3 constitute 26.43% of the portfolio.

Rigetti Computing holds the largest weight at 11.33% followed by D-Wave Quantum at 8.6% and IonQ at 6.5%.

McKinsey estimates the quantum computing industry could reach $72B in annual value by 2035.

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Quantum computing stocks have been on a tear in recent months, and while the rally has cooled down in recent days, many still see it as a golden ticket to multibagger gains. But buying individual stocks may not be the right way to gain exposure, and I’d look into ETFs like WisdomTree Quantum Computing Fund (BATS:WQTM) instead.

This is because the quantum computing sector is extremely speculative. There are several quantum computing startups, and they’re all rushing to make critical breakthroughs. There’s no guessing which one will win out in the end.

If you want exposure to “the next Nvidia (NASDAQ:NVDA)” of quantum computing, pure-play quantum computing ETFs seem like the best way to do so. They’re diversified across the sector, and you’re more well-positioned to benefit if the quantum computing narrative succeeds.

Most quantum computing ETFs do give you exposure to quantum computing startups, but they also include lots of mega-cap exposure. This can overlap with other investments you already have in your portfolio, and you won’t be as exposed to the upside if one of these startups starts gaining exponentially.

If you want something that mostly strips out these mega-caps and focuses more on startups plus lesser-known players in this space, WQTM is worth buying.

WisdomTree Quantum Computing Fund is a newer ETF that gives you that exposure. It tracks the WisdomTree Classiq Quantum Computing Index and blends pure-play quantum companies with diversified tech leaders to balance high-growth potential with established players in advanced computing.

There are a total of 37 holdings in this ETF. They do include some mega-cap names and well-known stocks, but the bulk of the weight tilts towards startups.

Rigetti Computing (NASDAQ:RGTI) is the biggest holding, with an 11.33% weighting. D-Wave Quantum (NYSE:QBTS), IonQ (NYSE:IONQ), Intel (NASDAQ:INTC) are at 8.6%, 6.5%, and 4.98%, respectively.

Google (NASDAQ:GOOGL) has the fifth biggest weight at 3.72%. And although this is a mega-cap company, it is one of the leaders in quantum computing and is arguably the best AI company. There are rumors that Apple (NASDAQ:AAPL) is considering paying Google $1 billion annually to power Siri with its Gemini model.

There are several other quantum computing and semiconductor stocks scattered throughout its holdings list, but the top 10 constitute 50.88% of the entire portfolio. The top 3 constitute 26.43%.

I believe this is a good arrangement if you want quantum computing exposure, as the rest of the portfolio can cushion downside risk if the narrative fails, and you can still get considerable upside if it does not.

Quantum computing stocks have been on an explosive rally and are no longer penny stocks. IonQ alone has a market cap of $19 billion, with D-Wave Quantum and Rigetti having their market caps at ~$21 billion combined. It’s easy to see why the market is now taking a breather before bidding up these stocks even more.

At the same time, if quantum computing does succeed, the potential could be magnitudes bigger. Bulls have baked in nosebleed valuations today because they’re pricing in the best-case scenario for the industry. Each of these companies could see tens of billions in revenue if they can sell working quantum computers to data centers, and perhaps even individuals.

McKinsey believes the industry could be worth up to $72 billion annually a decade from now.

I wouldn’t get carried away by the bullishness, though. Realistically, these stocks are primed for an extended correction if the AI rally fades and there are no major quantum computing breakthroughs. Most analysts believe the quantum computing industry will generate ~$20 billion in 2030, which is almost equivalent to the market cap of IONQ today. Thus, I’d keep my exposure low if perchance you’re well ahead of the curve.