EXCLUSIVE: 3 ETFs Positioned For Microsoft's Quantum Breakthrough

Microsoft Corp. MSFT has set the investment world abuzz with the announcement of its first-of-a-kind quantum chip, Majorana 1. As excitement builds around the breakthrough, ETFs with exposure to quantum computing and semiconductor advancements are drawing increased investor interest.

Investors looking to capitalize on the quantum computing revolution can explore several ETFs with exposure to key players in this space.

Defiance Quantum ETF QTUM

QTUM provides exposure to companies engaged in quantum computing, AI, and machine learning. With holdings in Microsoft, IBM IBM, and Alphabet GOOG GOOGL, it is well-positioned to benefit from advancements in quantum technology.

Defiance ETFs CEO Sylvia Jablonski highlighted how Majorana 1 has already driven investor interest in QTUM. "The good thing about that ETF is it holds the large-cap, quality, balance-sheet-established players like MSFT but mixes in pure plays like IonQ and Rigetti as well."

Also Read: Microsoft’s Quantum Leap: Will Majorana 1 Lift MSFT Stock?

Global X Artificial Intelligence & Technology ETF AIQ

AIQ invests in firms at the forefront of AI and computational advancements, including Microsoft. With quantum computing playing a crucial role in AI's evolution, the fund could see increased investor interest.

VanEck Semiconductor ETF SMH

While primarily focused on semiconductor companies, SMH includes exposure to firms developing quantum computing hardware. Nvidia NVDA, Qualcomm QCOM and Broadcom are among its top holdings. Given that quantum computing relies on advanced semiconductor technology, any advancements in this sector could indirectly boost the ETF.

Sylvia Jablonski on the ETF Impact of Microsoft's Majorana 1

Jablonski weighed in on the implications of Microsoft's quantum computing advancement, emphasizing its significance for ETFs in the space.

Satya Nadella, Microsoft's Chairman and CEO, described the chip as a "physics and fabrication breakthrough" rather than a pure quantum computing leap. He compared it to the transistor moment of quantum computing, a milestone that could pave the way for the technology's practical application.

Jablonski reinforced this view, stating, "He's saying that we are at a key inflection point where quantum computing transitions from being experimental to practical and scalable. It reminds me of the ChatGPT moment."

Jablonski believes that Microsoft's breakthrough could have lasting implications. "Microsoft's breakthrough accelerates quantum error correction and scalability. It could lead to sustained confidence in the sector. When you have quality companies like Alphabet, Microsoft, and IBM blessing these innovations, that bodes well for the consumer and his or her sentiment on the quantum sector."

According to Jablonski, QTUM ETF balances both risk and reward effectively. "We have both—having the large caps serves as a ballast for risk on volatility on the small caps."

Also Read: Microsoft’s Quantum Leap Hits A Technical Snag: Death Cross Looms Large

Are We Closer to Real-World Applications?

Jablonski sees practical applications emerging sooner than skeptics expect. "Microsoft's error correction claims, if validated, represent significant progress. Quantum computing is already used in certain workflows, risk analysis, supply chain, and logistics cases."

Beyond quantum computing, AI-driven ETFs are seeing strong momentum, particularly in automation, robotics, and generative AI. "We also think that 6G and the future of tech connectivity will be a big topic this year," Jablonski noted.

The Road Ahead

Although high error rates and commercialization challenges still limit quantum computing's immediate applications, Microsoft's Majorana 1 chip signals a major step forward. With ETFs offering a diversified approach to investing in this space, investors can position themselves to benefit from the quantum computing revolution while mitigating risks associated with individual stocks.

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