IBM and Cisco plan network of quantum computers by early 2030s

NEW YORK/SAN JOSE - IBM (NYSE:IBM) and Cisco (NASDAQ:CSCO) announced Thursday their intention to collaborate on developing networked distributed quantum computing, with plans to deliver an initial demonstration within five years. Cisco, currently trading near its 52-week high at $78.39 and boasting a market capitalization of $309.73 billion, brings significant financial strength to this partnership. According to InvestingPro data, the networking giant has delivered impressive returns with a 35.83% gain year-to-date.

The partnership aims to combine IBM's quantum computing capabilities with Cisco's networking expertise to create a connected network of large-scale, fault-tolerant quantum computers targeted for completion by the early 2030s.

According to the companies, the collaboration will focus on linking multiple quantum computers to enable computations across tens to hundreds of thousands of qubits. This network would potentially support trillions of quantum gates - the fundamental operations required for quantum applications in optimization problems and design of complex materials.

"By working with Cisco to explore how to link multiple quantum computers together into a distributed network, we will pursue how to further scale quantum's computational power," said Jay Gambetta, Director of IBM Research and IBM Fellow, in the press release.

The companies plan to develop quantum hardware and software that physically connects large-scale quantum computers. Their initial proof-of-concept demonstration, targeted by 2030, will attempt to entangle qubits from multiple separate quantum computers located in distinct cryogenic environments.

Cisco will contribute its vision for quantum networking infrastructure, including hardware and software designed to preserve quantum states, distribute entanglement resources, and synchronize operations with sub-nanosecond precision.

IBM plans to build a quantum networking unit to serve as the interface to a quantum processing unit, converting stationary quantum information into "flying" quantum information that can be linked across multiple computers.

The companies stated that this distributed quantum computing network could lay the groundwork for a quantum computing internet by the late 2030s, connecting quantum computers, sensors, and communication systems.

The announcement was made in a joint press release issued by both companies.

In other recent news, Cisco has reported strong fiscal first-quarter results, with product orders growing by 13% year-over-year, or 9% when excluding hyperscalers. The company recorded $1.3 billion in artificial intelligence (AI) orders during the quarter, marking approximately 50% growth quarter-over-quarter. Following these results, UBS raised its price target for Cisco to $90, maintaining a Buy rating, while Rosenblatt Securities increased its target to $100, also keeping a Buy rating. Melius Research echoed this sentiment, raising its target to $100 from $84, citing strong execution in Cisco's networking segment.

Piper Sandler adjusted its price target for Cisco to $86, up from $70, noting recent successful quarters driven by webscale AI infrastructure buildout and a campus refresh opportunity. Additionally, Cisco's joint venture with AMD and HUMAIN is expected to generate $300-500 million in revenue, according to Evercore ISI, which maintained an In Line rating with an $80 price target. This venture aims to provide full-stack AI solutions, with operations starting in 2026. These developments highlight Cisco's ongoing growth and strategic initiatives in the AI and networking sectors.

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