As quantum computing goes mainstream, which small caps are set to benefit most?

Modern computing is approaching the physical limits of semiconductor chips. Investors are shifting their attention to quantum technologies, which promise performance leaps beyond what classical systems can achieve. What was once a scientific abstraction is becoming a commercial market where the world’s largest tech companies and venture capital firms are competing.

According to McKinsey, revenue from quantum computing companies is expected to exceed $1 billion in 2025, driven by adoption in private industry and the defense sector. The consultancy estimates that global revenue across quantum computing, communication, and sensing could reach $72 billion by the mid-2030s.

The expansion is supported by record investment and intensifying competition. In 2024 alone, venture funding in quantum startups reached about $1.6 billion. Governments in the U.S., Australia, Singapore, Japan, and China have launched large-scale financing initiatives, accelerating the shift from laboratory research to commercial deployment.

IBM remains the market leader, with more than 600,000 users on its IBM Quantum platform and the recent release of its high-performance Qiskit SDK 1.x. Other key players include Quantinuum, IonQ, Rigetti, and PsiQuantum, all young firms advancing hardware and software integration for full-stack quantum systems.

While attention has focused on the large firms, a cohort of small-cap companies is quietly enabling the industry’s infrastructure. They build the components without which no quantum system can operate: cryogenic chambers, lasers, optics, and quantum-safe encryption tools. They make up two new indexes compiled for Oninvest by analyst Aldiyar Anuarbekov: the Quantum Small-Cap Equal Weight Index and the Quantum Small-Cap Cap-Weighted Index. Both include 12 public companies that manufacture quantum hardware, develop processors, or offer post-quantum cybersecurity systems. Developers of full quantum computers – IonQ, Rigetti, and D-Wave – were excluded as their market capitalizations exceed the small-cap range.

Constituents of quantum small-cap indexes

The equal weight index advanced 11% in 2023, 70% in 2024, and 81% year to date in 2025 – an annualized return of roughly 56% on average. By comparison, the S&P 500 has gained only 14% this year. The cap-weighted index, however, has a negative average annualized return of 3% for the period, pulled down by several underperformers. The divergence underscores that portfolio diversification, not concentration in a few leaders, is key for sustained investing success in the quantum segment.

Anuarbekov also picked three promising small-cap companies that, in his view, are setting the pace in the development of quantum technologies.

BTQ Technologies

Vancouver-based BTQ Technologies is positioning itself as an infrastructure provider for a quantum-resilient internet. In July, Alliance Global Partners noted in a report that BTQ’s technology portfolio can safeguard networks from future quantum attacks. The company’s key task now is to expand its product portfolio and confirm its effectiveness through successful pilot projects.

BTQ’s potential is tied to the global transition of cryptography to post-quantum standards. The company’s Quantum Secure Stablecoin Network (QSSN) protocol for quantum-secure data transmission and digital transactions has already received international recognition. If QSSN becomes a widely adopted standard, BTQ could receive transaction-based revenue streams.

Alliance Global Partners maintains a “buy” rating on BTQ Technologies with a target price of $10 per share, close to its current market value.

Arqit Quantum

Based in the UK, Arqit Quantum is among the first commercial providers of “quantum-safe” encryption and a participant in the U.K. National Cyber Security Centre’s Post-Quantum Cryptography Pilot. Its Encryption Intelligence platform helps enterprises to identify vulnerabilities and plan migrations to quantum-resistant security systems.

In September, Arqit signed a commercial license agreement with Canada’s Fabric Networks to deploy its NetworkSecure and Symmetric Key Agreement platforms. Analysts at H.C. Wainwright project Arqit’s revenue will rise to $5.7 million only in 2026 as pilot projects scale into production.

Arqit is debt-free and held $24.8 million in cash as of May, according to its financial report. Overall, Arqit Quantum is a bet on cybersecurity becoming an integral part of quantum infrastructure. H.C. Wainwright rates the stock a “buy” with a target price of $52 per share. Arqit closed at $53.40 per share yesterday, October 15, on the Nasdaq.

Archer Materials

Australia’s Archer Materials is developing a chip-based qubit processor designed to operate at room temperature – a potential breakthrough that would eliminate the need for costly cryogenics. The company plans to unveil its prototype in 2026. If successful, Archer’s technology could reduce the cost, size, and power consumption of quantum devices, accelerating their commercial adoption. Archer is one of the few players in the market. 

The company is financially stable, with $13.7 million in cash reserves and no debt. According to MarketWatch, the consensus rating on Archer Materials is “hold.”

The AI translation of this story was reviewed by a human editor.