Quantum computing Report Interpretation

Overview

BofA Global Research's thematic guide argues that quantum computing is progressing from scientific demonstration toward commercial relevance. It explains the technology and ecosystem while linking advances in logical qubits, error correction, hybrid computing, cybersecurity preparedness, public funding and enterprise adoption to a growing long-term market opportunity.

Core views

The report characterizes quantum computing as a potentially transformative computing platform built on qubits, superposition and entanglement. Because each additional qubit doubles the number of quantum states that can be represented, computing capability can scale exponentially, although only for certain specialized problems rather than as a universal replacement for classical systems. BofA describes a heterogeneous future in which CPUs, GPUs and quantum processing units work together. It cites existing integrations involving OQC and SEEQC with Nvidia systems, and notes that high-performance-computing-plus-quantum deals grew at a 63% CAGR over 2021-25. The central technical constraint is error. Physical qubits are highly susceptible to noise and decoherence, so useful systems require quantum error correction that groups physical qubits into more reliable logical qubits. The report highlights progress including Quantinuum and Microsoft reducing errors by 11x to 800x versus direct physical-qubit calculations, lowering the logical-circuit error rate from about 0.8% to 0.001%. Quantinuum also demonstrated 48 error-corrected logical qubits from 98 physical qubits in March 2026. Frontier logical-qubit counts have doubled every eight months over the past two years, though the report emphasizes that roadmaps remain projections and commercially relevant fault tolerance still depends on sustained improvements in fidelity, control, scale and cost. Different hardware modalities create differing trade-offs. Superconducting and trapped-ion systems are described as the most mature; trapped ions and neutral atoms generally offer higher qubit quality but lower speed, while superconducting systems may be easier to integrate into corporate digital infrastructure. The report does not identify one likely winner: it argues that modalities may serve distinct workloads and that the eventual market could consolidate around multi-modality and hybrid systems. Current data show superconducting platforms accounted for over 60% of QPUs released during 2007-26, while trapped-ion systems show the strongest fidelity metrics among the three modalities compared. BofA sees commercial use cases developing in stages as quantum operations scale. In the millions-of-operations era, finance and security could see applications including threat detection, fraud prevention, derivatives pricing, bond trading and arbitrage. The billions era could support AI-related data generation, while the trillions era could enable quantum chemistry, drug discovery, battery simulation and materials discovery. The report cites HSBC and IBM's reported 34% improvement in predicting the likelihood that an algorithmic bond trade would be filled versus common classical techniques. It also notes that quantum computers already show narrow advantage in some applications, with broad commercial advantage expected from 2027 onward in areas including drug discovery, robotics and chemistry. Quantum AI is presented as a complementary relationship rather than a substitute for existing AI infrastructure. Quantum computing could eventually provide additional compute capacity for generative-AI training and simulation, while AI can improve quantum-system calibration, testing and real-time error correction. BofA cites Nvidia's April 2026 Ising Calibration and Ising Decoding models for quantum-processor calibration and error-correction decoding. The report references estimates of $2.6tn-$4.4tn of annual generative-AI value across 63 use cases and potential quantum-computing value of roughly $0.9tn-$2tn in 2035 across energy and materials, pharmaceuticals and medical products, finance, and travel, transport and logistics. Cybersecurity is a key near-term implication. Shor's algorithm could theoretically break RSA-2048 encryption once sufficiently capable quantum hardware exists. Academic estimates of the required noisy physical qubits fell from about 1 million in May 2025 to 100,000 in February 2026 and as few as 10,000 in March 2026; the latter represented a 90% reduction in one month. BofA argues that organizations may need to act before large-scale quantum computers arrive because migrating encryption standards can take five to ten years and stored encrypted data can be collected today for later decryption. Yet 70% of surveyed organizations did not have a post-quantum cryptography project. The report identifies quantum key distribution and post-quantum cryptography as practical responses, noting that NIST has finalized initial standards including ML-KEM, ML-DSA and SLH-DSA. Quantum communications and sensing offer earlier commercialization pathways. Quantum key distribution is already commercially deployed at limited scale and detects eavesdropping because interception disturbs quantum states. However, optical-fibre transmission is limited to roughly 100km without repeaters, and viable quantum repeaters remain a major barrier to global quantum networks. Quantum sensors require fewer qubits than universal quantum computers and can measure time, gravity, magnetic fields and rotation with precision beyond classical instruments, although miniaturization and portability remain difficult because many systems need vacuum chambers, lasers and magnetic shielding. The report links technical development to an expanding global ecosystem. Cumulative public quantum investment reached at least $58bn by 2025, led by Europe at $15.4bn and China at $15.3bn. It describes quantum sovereignty as increasingly important to national competitiveness, security, defense and supply-chain resilience. Private and public capital are also accelerating: total quantum-tech investment since 2014 reached $35.7bn, 70% of which occurred in the latest three years, and quantum-computing investment in 2025 increased fivefold year on year. The top 10 quantum-startup deals in 2025 totaled $7.6bn, equal to about 60% of total deal value. Enterprise engagement is rising but remains early-stage. A 2026 survey cited by BofA found 56% of organizations actively exploring quantum through proof-of-concept work, while 13% had reached production. Quantum's average share of R&D budgets rose to 11% from 5.4% in 2021, a roughly 20% CAGR. Barriers vary by buyer, but skills shortages, hardware immaturity, budget and ROI uncertainty, integration complexity and regulatory requirements are material. The report estimates roughly 20,000 quantum professionals globally, with 50%-66% of quantum job openings unfilled. BofA's market estimates frame the scale of the opportunity. Its US semiconductor colleagues forecast quantum-computing TAM of $10bn in 2030 from $0.5bn in 2025. Total quantum-technology TAM is forecast to grow from $1.25bn in 2025 to $15bn in 2030 and $80bn in 2035, with quantum compute increasing from 44% to 75% of the market over 2025-35. Quantum communications are projected to rise from $0.6bn in 2025 to $14bn in 2035, while quantum sensing rises from $81mn to $6bn. These projections depend on continued advances in qubit quality, fault tolerance, deployment infrastructure and customer adoption.

Analysis framework

The report uses a dictionary-style structure to explain core scientific concepts before connecting them to hardware modalities, error-correction progress, application pathways, enterprise surveys, investment data, government initiatives and market-size forecasts. It compares technical measures such as physical and logical qubits, gate fidelity, coherence and scaling roadmaps to explain why commercial utility depends on both size and reliability.

Methodology notes

• Industry AnalysisSupply-demand framework

  Quantum ecosystem and TAM analysis

  The report maps hardware, components, software, communications, sensing, customers, funding and government support to explain the quantum industry's development and projected market growth.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Quantum supply-chain analysis

  The report traces how enabling inputs such as cryogenics, control electronics, photonics, foundries and materials support quantum hardware and downstream applications.

• Other

  Quantum performance benchmarking

  The report compares qubit counts, logical-versus-physical qubits, gate fidelity, coherence, speed and quantum volume to assess technical progress across modalities.

Key data

• Quantum technology TAM$15bn by 2030; $80bn by 2035BofA Global Research forecast; $1.25bn in 2025.
• Quantum computing TAM$10bn by 2030BofA US semiconductor colleagues' forecast, from $0.5bn in 2025.
• Global public quantum investmentAt least $58bnCumulative through 2025; Europe $15.4bn and China $15.3bn.
• Frontier logical-qubit scalingDoubled every 8 monthsOver the past two years, based on the report's dataset and roadmaps.
• Enterprise adoption56% actively engaged; 13% in production2026 survey of quantum stakeholders.
• Quantum R&D budget share11%Average share in 2026, up from 5.4% in 2021.
• Post-quantum preparedness70% without a PQC projectIBM survey cited by the report.
• Shor's algorithm requirementAs few as 10,000 noisy qubitsMarch 2026 theoretical estimate for breaking RSA-2048; 90% below the February 2026 estimate.
• Quantum tech investment$35.7bnTotal investment over 2014-26; 70% occurred in the latest three years.
• Quantum computing theme performancec.95%Since December 2024 versus c.25% for the S&P 500, as of 1 September 2026.

Impact & implications

The report argues that quantum's economic impact will emerge unevenly: cybersecurity, sensing and hybrid computing may develop earlier, while broad compute-driven value depends on fault-tolerant logical qubits. It sees government support, sovereignty concerns and rising enterprise investment as reinforcing ecosystem development, but views technical reliability, integration capacity and skills as critical gating factors.

Risks

• Noise, decoherence and insufficient qubit fidelity remain barriers to fault-tolerant, commercially useful quantum computing.
• Scaling qubit counts increases control, cabling, interference, cost, energy-efficiency and latency challenges.
• Talent shortages, hardware immaturity, uncertain ROI and integration complexity constrain adoption.
• Quantum computers could eventually undermine current RSA and elliptic-curve encryption, while many organizations lack post-quantum cryptography programs.
• Quantum networks remain limited by transmission distance and the absence of viable quantum repeaters for global-scale deployment.

What to watch

• Progress in logical qubits, error correction and two-qubit gate fidelity relative to physical-qubit scaling.
• Evidence of broad quantum advantage and commercial deployments from 2027 onward.
• Post-quantum cryptography migration activity, standards adoption and quantum-security preparedness.
• Enterprise adoption moving from proof of concept into production.
• Government funding, export controls, sovereignty policies and quantum-HPC deployments.
• Capital flows, hardware-modality roadmaps and expansion of hybrid classical-quantum infrastructure.