On Thursday, International Business Machines Corp (NYSE:IBM) CEO Arvind Krishna said quantum computing could begin making a measurable contribution to the company’s revenue and profit by 2028 or 2029.
IBM Sees Quantum Computing Driving Revenue and Profit
Speaking on CNBC’s “Mad Money,” Krishna said investors may not have to wait much longer for quantum computing to become a meaningful business for IBM.
“I think that in 2028 or 2029, you’ll see it have a measurable impact on our top line and bottom line,” Krishna said.
He added that IBM has grown increasingly confident about the technology’s long-term economic potential.
“By the end of the 2030s, we are now pretty convinced this is a trillion dollars of value,” Krishna said.
IBM and Algorithmiq Report Quantum Advantage
IBM and quantum startup Algorithmiq on Thursday unveiled research they said demonstrated quantum advantage — the ability of a quantum computer to solve certain problems more efficiently than leading classical systems — and validated the results.
Krishna said IBM’s quantum technology revealed previously unobserved material behaviors that conventional computing had been unable to capture.
Those discoveries could eventually support advances in battery technology, new materials, fusion energy and drug development.
“A quantum computer can do things better, faster, cheaper, in a way that normal classical computers cannot do at this time,” Krishna said.
IBM Invests in Quantum Chip Manufacturing
Quantum computing still faces significant obstacles, including error rates, hardware complexity and the challenge of scaling systems for broad commercial use.
IBM, however, is increasing its investment in the technology. In May, the company announced plans to build a standalone quantum chip foundry backed by a $1 billion commitment from the U.S. Department of Commerce through CHIPS incentives, matched by another $1 billion from IBM.
IBM is competing with companies including Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) and Rigetti Computing (NASDAQ:RGTI) to bring quantum technology into commercial use.
Krishna Addresses IBM’s Post-Earnings Stock Sell-Off
Krishna also addressed concerns following news regarding IBM’s preliminary second-quarter results, which triggered the company’s worst single-day stock decline on record.
Shares fell 25% on July 14 after IBM said some customers had postponed capital spending projects.
Krishna said the delayed deals had not been abandoned.
“Here’s the good news: about 40% of them have already closed in three to four weeks,” he said. “That’s a good signal that it is a deferral, not a destruction.”
IBM posted second-quarter revenue of $17.16 billion, surpassing the consensus estimate of $16.86 billion, while adjusted earnings came in at $2.93 per share, ahead of analysts’ expectations of $2.86 per share.
Price Action: IBM shares closed at $223.65 on Friday, up 0.86%, according to Benzinga Pro.
Benzinga Edge Rankings place IBM in the 82nd percentile for Quality, while the stock continues to show a negative price trend across the short, medium and long-term time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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