Why Now Could Be the Right Time to Buy the Defiance Quantum ETF

Compared to the tech of just five to 10 years ago, artificial intelligence can feel revolutionary. It's come so far, so fast that it almost feels like we're living in the future right now.

What if I told you that there was another technological leap ahead of us?

Quantum computing may still be years off from becoming a reality with real-world applications, but the pace of progress over the past few years is making it feel less like science fiction than ever. Performance is improving rapidly, and developers are imagining ways that it can be applied to technology, mechanics, medicine, and more.

That means investors are looking for ways to get in on the theme right now. Giant tech companies (and others) are already investing billions of dollars. If quantum really is the next big thing after AI, investors may want to think about getting exposure before the market really starts noticing even if they're not quite sure which companies to put their money into.

That's why this may be a great time to buy the Defiance Quantum ETF (NASDAQ: QTUM), an exchange-traded fund (ETF) that invests in some of the industry's most influential names, and here are three reasons why.

Quantum breakthroughs are happening faster than expected

Science is still miles away from harnessing quantum computing's full potential. But there are significant advancements in the technology happening as we speak. One example is Google's new Willow quantum chip. It's already demonstrated the ability to run highly complex calculations in minutes that would have taken traditional computers literally billions of years.

Another is Qiskit, an open-source quantum computing software package originally developed by IBM. It continues to demonstrate massive performance improvements and is now 54 times faster at completing a series of benchmark tests than its next closest competitor.

Also, IBM's quantum computing performance is now 50 times faster than it was just two years ago. A quantum experiment that took 112 hours to complete in 2023 is now finishing in 2.2 hours.

Just like with generative AI, development in quantum computing is happening at lightning speed. Investors often benefit when they position themselves as the tech is picking up. So now could be a great time to get in.

pImage source: Getty Images.

The money is starting to show up, too

When AI first started taking off, tools like ChatGPT had already begun demonstrating their usefulness. When the world began to recognize its real potential, big companies stepped in and committed tens of billions of dollars to try to win the global AI race.

That's happening with quantum computing right now. And it's still in its early stages.

Some examples:

• JPMorgan Chase recently announced it was investing $10 billion into several next-gen technologies, including quantum computing.
• Earlier in 2025, IBM announced that it would be spending $30 billion on research and development (R&D) to advance its quantum computing capabilities.
• Microsoft is reportedly investing more than $1 billion into quantum computing R&D.

As momentum grows, investors are thinking about the best way to add quantum exposure to their portfolios. That's where the Defiance Quantum ETF comes in. Its top holdings are:

Data source: Defiance ETFs, Nov. 25, 2025.

Betting on the theme is better than trying to pick the winners

In high-growth sectors like AI or quantum computing, it's tempting to try to pick the theme's long-term winners or get in on the hot stocks of the moment. But sometimes, it's better to just invest in the whole story instead of individual companies.

The Defiance Quantum ETF -- launched in 2018 -- represents a more practical way to gain exposure to the quantum trend. It invests in roughly 70-80 different stocks of companies across the quantum hardware, semiconductor, industrial, and cloud computing spaces. Its expense ratio of 0.40% is quite reasonable for a niche, thematic fund.

One of the fund's key features is its ability to spread some of the risk out. The portfolio components are equal-weighted, so no single company dominates the portfolio. Not only will that help mitigate concentration risk, it also means your holding won't plunge if something happens to one or two stocks.

The WisdomTree Quantum Computing ETF, another fund with a similar objective, has Rigetti Computing, D-Wave Quantum, and IonQ as its top three holdings with a combined allocation of 22%. Those three are Defiance Quantum ETF's portfolio as well, but with a more modest 6% combined weight.

Your mileage may vary as to whether that's a good thing or not. In a high-risk, emerging sector like quantum computing, I think you want to minimize your risk whenever possible, and spreading out investments across dozens of different stocks helps accomplish that.

The Defiance Quantum ETF won't be the right fit for every portfolio. Some may prefer a higher concentration in the industry's biggest names right now. But for investors who want to position themselves ahead of major tech shifts and prefer using a diversified ETF rather than rolling the dice on a single quantum stock, this might be the best way to play it.

David Dierking has no position in any of the securities mentioned in this article. JPMorgan Chase is an advertising partner of Motley Fool Money. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Coherent, Intel, International Business Machines, JPMorgan Chase, Lam Research, and Microsoft. The Motley Fool recommends Teradyne and recommends the following options: long January 2026 $395 calls on Microsoft, short January 2026 $405 calls on Microsoft, and short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.