IBM (IBM) stock jumped Thursday after HSBC said the tech giant’s quantum computers could improve bond market price predictions.
U.K.-based HSBC (HSBC) said that it utilized IBM’s Quantum Heron processors to deliver a 34% improvement in predicting how likely a bond trade would be filled at its quoted price, compared to currently used algorithmic techniques. HSBC and IBM applied the technology to an anonymized set of European bond trading data and found the technology “could potentially offer superior solutions over standard methods which use classical computers alone,” the bank said in a news release.
The effort is an early test of how the power of quantum computing could be harnessed within financial markets. Philip Intallura, HSBC Group’s head of quantum technologies, called the experiment “a groundbreaking world-first in bond trading.”
Quantum computers rely on qubits, or quantum bits, to process information at a significantly faster rate than traditional computers. The technology is still considered by most experts to be in an early stage. But the technology’s potential for scientific and technological breakthroughs has been on investors’ radar for several years.
The buzz around the technology has grown this year, with tech giants like Amazon (AMZN), Microsoft (MSFT) and Google-parent Alphabet (GOOGL) each announcing breakthroughs in developing quantum computers.
IBM, meanwhile, announced in June that it plans to build a large-scale quantum computing center in Poughkeepsie, N.Y. by 2029. The Armonk, N.Y.-based tech giant said in August it would partner with Advanced Micro Devices (AMD) to develop “quantum-centric supercomputing” technology.
IBM Stock: Watching Quantum
In recent trading in the stock market today, IBM stock rallied more than 5% to 282.89. IBM shares are ahead 29% year to date, outperforming the S&P 500. HSBC stock was down 1.5% in recent trades.
IBM — one of 30 stocks that make up the Dow Jones Industrial Average — saw its shares slump following its Q2 results in late July. Shares closed that month 14% lower and lost another 3% in August.
However, Thursday’s gain adds to a strong overall month for IBM. Shares have advanced 16% since the start of September.
That action has formed a 13-week long cup pattern, as identified by IBD MarketSurge. The buy point from that pattern is 296.16, which would mark a return to a high point for the stock reached in late June.
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