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IBM’s ‘Loon’ Chip Marks Major Step Toward Practical Quantum Computers by 2029

IBM has unveiled a new experimental quantum computing chip, dubbed “Loon,” that the company says achieves a critical milestone toward building useful, error-corrected quantum computers by 2029.

Quantum computers hold the potential to solve complex problems in chemistry, physics, and logistics that would take traditional supercomputers thousands of years to complete. However, the fragile quantum states that power these machines are notoriously prone to errors — a challenge that has long stood in the way of practical applications.

To address this, IBM in 2021 proposed an innovative approach to error correction, adapting algorithms originally developed to improve cellphone signal reliability. The method uses a hybrid system combining quantum and classical chips to stabilize qubits — the basic units of quantum computation.

According to Jay Gambetta, IBM Research director and IBM Fellow, the Loon chip was fabricated at the Albany NanoTech Complex in New York, using the same advanced semiconductor tools found in cutting-edge commercial fabs.

“Loon remains in early stages,” Gambetta said, “but it demonstrates a critical step toward error-corrected quantum computing that can outperform classical systems.”

IBM also introduced another chip, “Nighthawk,” which will be made available by the end of this year. The company expects Nighthawk to surpass classical computers on specific tasks by late 2026.

Analyst Mark Horvath of Gartner called the new design “very clever,” noting that the inclusion of quantum interconnections between qubits makes the chips harder to build but exponentially more capable.

IBM plans to make Nighthawk’s code openly available to researchers and startups, fostering a community-driven testing model to validate claims of quantum advantage — when quantum systems outperform classical ones.

Quantum Computing Stocks Send Speculators on a Wild Ride as Hype Outpaces Reality

Quantum computing stocks have become Wall Street’s latest obsession — and one of its most unpredictable playgrounds. Companies such as Rigetti Computing, IonQ, D-Wave Quantum, and Quantum Computing Inc. have seen their share prices surge by 100% or more this year as investors chase what some call “the next great technological revolution.”

These firms are racing to commercialize quantum computers — machines that exploit the principles of quantum mechanics to solve problems far beyond the reach of today’s fastest supercomputers. The potential applications range from cryptography and logistics to drug discovery and financial modeling.

“It feels like science fiction has suddenly become a near-term reality,” said Sylvia Jablonski, CIO of Defiance ETFs, which runs the Defiance Quantum fund. Yet, analysts warn that enthusiasm may be running far ahead of fundamentals. Rigetti shares, for instance, have skyrocketed from just over $1 to as high as $58 this year, trading at more than 1,000 times the company’s sales.

“It’s a magic act,” said Christopher Poch of Promethium Advisors. “How else do you explain a company with a $13 billion valuation but only $22 million in forecast revenue?”

Despite the eye-popping numbers, most quantum firms remain unprofitable. Some, like Rigetti, have posted paper profits from changes in the value of securities, not from operations. Analysts say valuations in the “Quantum 4” — Rigetti, IonQ, D-Wave, and Quantum Computing Inc. — are now more art than science.

Still, optimism remains high. Major financial players such as JPMorgan Chase and HSBC have begun investing in quantum-based systems, and McKinsey projects the global quantum market could exceed $100 billion. But as Neuberger Berman’s Rick Bradt cautioned, “The promise is undeniable — but the timing remains deeply uncertain.”

IBM’s Cloud Growth Slows Despite Strong AI Mainframe Demand and Solid Q3 Results

IBM reported third-quarter revenue and profit that beat market expectations, but investor optimism dimmed as growth in its key cloud software division slowed. The company’s shares fell 5% in after-hours trading, despite strong results driven by soaring demand for its new AI-powered mainframe systems.

Revenue in the hybrid cloud unit, which includes Red Hat, rose 14% compared to 16% in the previous quarter — a slowdown that raised investor concern about IBM’s ability to fully capitalize on the global cloud boom. Total quarterly revenue reached $16.33 billion, surpassing analyst estimates of $16.09 billion, according to LSEG data.

CEO Arvind Krishna said IBM expects Red Hat’s growth to return to mid-teen levels by 2026. Analysts noted that the deceleration in software sales may disappoint investors, given the segment’s high margins. However, IBM’s infrastructure division, housing its mainframe business, was a standout performer with revenue up 17% to $3.56 billion.

The new mainframe, optimized for AI workloads, is being widely adopted in the financial sector due to its data security and encryption strengths. IBM’s total AI-related business has grown to $9.5 billion, up $2 billion from the previous quarter. The company raised its full-year outlook, now expecting revenue growth above 5% at constant currency.