How to invest in quantum computing on the ASX

Three ways to own the theme from Australia.

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Quantum computing has become one of the most interesting themes to buy into for tech-savvy investors.

The companies behind this trend that are actually building the machines are mostly listed in New York.

Despite this, Australia has world-class research, although none of the company's monetising this is publicly traded.

For example, Silicon Quantum Computing, Diraq, and Q-CTRL are all private.

That leaves three practical routes for ASX investors to get exposure.

Processor chip on circuit board with copy space for design.

Image source: Getty Images

The one ASX quantum computing pure play

Archer Materials Ltd (ASX: AXE) is the closest thing the local market has to a direct exposure.

The company is developing a semiconductor qubit chip and employs just eight people.

It carries a market capitalisation of roughly $55 million and the shares trade at 20 cents, against a 52-week range of 18 cents to 50 cents.

In July, the company announced some significant news.

Archer signed a three-year agreement with IonQ (NASDAQ: IONQ), the Nasdaq-listed quantum hardware business, giving it access to IonQ's cloud platform, its Forte-class systems and its upcoming Tempo-class machines.

Archer pays US$250,000 on signing and US$250,000 every six months, for US$1.5 million across the initial term.

The two companies will also study the feasibility of deploying an IonQ quantum computer inside Australia.

The agreement was funded alongside a $7 million placement and a $3 million share purchase plan.

Chief executive Dr Simon Ruffell was very bullish on the news:

Quantum compute power is no longer a horizon technology, but a strategically critical utility ready for commercial deployment.

The ETF route

The simplest option came to the ASX last month.

VanEck listed Australia's first quantum computing ETF on 6 August, the Vaneck Quantum ETF (ASX: QNTM).

The fund tracks the MarketVector Quantum Computing Ecosystem Index and charges 0.65% a year.

The index targets businesses building quantum hardware, businesses writing quantum software, and the companies supplying components to both.

For most investors, this is the sensible way to own the theme, because it removes the risk of picking the wrong machine individually.

The infrastructure angle

Quantum computers still need somewhere to be housed.

NextDC Ltd (ASX: NXT) is the obvious beneficiary if any sovereign machine is deployed here.

FY26 net revenue rose 16% to $405.0 million with underlying EBITDA of $248.8 million.

Contracted utilisation more than tripled to 740.1 megawatts against built capacity of 288 megawatts.

FY27 revenue guidance is $615 million to $640 million, though capital expenditure guidance of $5.25 billion to $5.75 billion is enormous against a $10.5 billion market capitalisation.

The risks worth naming

Timelines in this field slip constantly.

Archer has been developing its chip for years and still generates no revenue from it.

The IonQ agreement is an access deal rather than a revenue contract, and the feasibility study may conclude nothing.

Similarly, funds like QNTM diversifies the single-company risk without removing the sector risk, since every holding is priced on a future earnings that are highly volatile.

Foolish takeaway

I would treat quantum computing as a small satellite position rather than a core holding.

The ETF is the route I would choose for most portfolios, because it spreads the bet across an entire ecosystem for 0.65%.

Archer is the speculative stock, at 20 cents with eight employees.

NextDC is the least direct and the most commercially proven of the three.

Owning a theme this early means accepting that the payoff may be a decade away, or may never come at all.

Motley Fool contributor Mark Verhoeven has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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