Quantum Computing & Wall Street: It’s Complicated

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Right. So, IonQ (IONQ +21.20%). It surged. Everyone said Wall Street was piling in. Quantum computing! The future! And honestly, I wanted to believe it. I really did. I even started reading white papers. (Units of Cryptocurrency Lost: 12. Hours Spent Watching Charts: 9. Number of Panicked Texts to Friends: 24.) But then I started looking at the numbers, and it turns out, things are… well, complicated. It’s never simple, is it?

Passive Funds Don’t Pick Stocks

Every quarter, these enormous institutional investors – Vanguard, BlackRock, the usual suspects – have to file a 13F with the SEC. It’s basically a public list of what they own. And when you see them holding millions of IonQ shares, it’s easy to think, “Aha! The smart money is in!” But it’s not quite like that. Not at all. It’s more… algorithmic.

IonQ is in the Russell 2000, which is basically a list of the 2,000 smallest publicly traded companies. And these index-tracking funds – like BlackRock’s iShares Russell 2000 ETF – have to buy shares of everything in that index, proportional to its market cap. So if IonQ is 0.1% of the index, they have to allocate 0.1% of their assets to it. It’s not a vote of confidence, it’s just… math. Honestly, it feels a bit like being forced to date someone your friends don’t approve of. You just… do it.

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There’s More Than One Kind of Active Fund (Thank Goodness)

Okay, so not everyone is just following the algorithm. There are also these “active” funds. And they fall into two camps. Two very different camps. The first are these quantitative firms, like D.E. Shaw. They’re basically trading robots. They use algorithms to make short-term gains. They don’t care about the company’s long-term prospects. They just want a quick profit. It’s a bit… soulless, isn’t it? Like online dating.

Then there are the research-driven funds, like Morgan Stanley. These are the “smart money” people. They actually study companies. They build financial models. They take positions based on a genuine investment thesis. Morgan Stanley owns 16.6 million IonQ shares, which is significant. But it’s still a small piece of the pie for them. And it doesn’t necessarily reflect what Wall Street as a whole is thinking.

How to Read These 13F Filings (Without Losing Your Mind)

So, when you peel back the layers of these 13F filings, you realize that most of Wall Street’s quantum computing exposure is either passive, momentum-driven, or… well, insignificant. It’s a bit deflating, isn’t it? All that hype, all those white papers… and it’s mostly just index funds and robots.

It’s worth remembering that quantum computing is still incredibly speculative. It’s genuinely transformative technology, but commercial revenue at scale is years away. There’s a huge gap between scientific promise and investable reality. It’s like promising yourself you’ll start a strict diet and gym routine on Monday. It sounds good in theory, but…

If you’re using institutional ownership as a signal, make sure you’re reading it correctly. Focus less on the total number of institutional holders and more on who they are. Look for growth in active, research-driven holders as a more meaningful signal of institutional conviction. And most importantly, invest in companies that you have high conviction in over the long term. It’s not just about finding success in the market, it’s about finding some peace of mind too. And honestly, right now, I could really use some peace of mind.

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2026-02-27 17:24