Quantum computing was named a breakout technology in 2017 by the Massachusetts Institute of Technology. It showed up again on the list for 2020. Does that mean quantum computing is ready for prime time? Possibly. That is good news for the world, but the problem is few know what a quantum computer actually doesand investors dont know what quantum computing means for their portfolio.

Where to start? Microsoft (ticker: MSFT) is a large quantum player. And looking at its quantum business can help frame the issue for investorsand anyone else.

Its helpful to start a few steps back from Microsofts quantum aspirations.

Many people have heard of the quantum realm, thanks in large part to Walt Disneys (DIS) Marvel Cinematic Universe. The Avengers, after all, defeated Thanos in Avengers: Endgamethe highest-grossing film of all timewith the help of quantum tunnels. And the Guardians of the Galaxy navigated a quantum asteroid field in their latest stand-alone film.

In the quantum asteroid field, rocks popped in and out of existence. The idea being that in the quantum realm, almost anything is possible. Quantum has become an analogy for weird, counterintuitive outcomes.

Quantum physics does indeed dictate a bunch of weird things, including particlesnot the size of asteroidspopping in and out of existence.

Physicist Richard Feynman said once that all people need to know about quantum physics is the double-slit experiment.

In the experiment, a single electronwhich is a negatively-charged subatomic particlepasses through both slits at the same time. Very weird. But that is because particles have wavelike properties. A wave of water would hit both slits.

So an electron behaves like a wave. OK. But heres the thing, if someone watches the experiment unfoldputting a detector in front of the slitsthe electron stops acting like water. It goes back to being a particle. Weird.

That, curiously, has some benefits for a computer. In a traditional computer, a bitthe basic unit of computing powercan have a value of one or zero. A quantum bit, more commonly called a qubit, is the basic unit of quantum computing. It can have a value of one or zero or anything in betweenat the same time.

There are other things qubits can do, but multiple, simultaneous values makes quantum computers faster. A 64-bit computer can have roughly 18 quintillion (18 with 18 zeros) values. If a computer can do 2 billion values per second, it will take roughly 300 years to go through all potential values.

A 64-bit quantum computer can have, in theory, all 18 quintillion values at once. Go figure.

MIT put quantum computing back on its technology list in 2020 because a quantum computer with 53 qubits built by Google parent Alphabet (GOOGL) did a calculation, in about three minutes, that would have taken a traditional computer 10,000 years.

Quantum supremacy was demonstrated. Great. So when will consumers be buying a quantum desktop, and when will investors be bidding up Alphabet stock on exploding quantum sales?

Not yet.

Qubits are not reliable yet. There is noise, Stephen Jordan, Microsoft quantum principal researcher, told Barrons. People are still working out the hardware. There are, for instance, superconducting qubits, trapped-ion qubits, and topological qubits.

Picking between qubits isnt like beta or VHS, or a Mac versus a PC. With todays computers underlying hardware is the same and 100% reliable, adds Jordan.

The industry is still working out the hardware. To reduce the noise, usually, you take qubits and string a bunch together to make a computing qubit, explains Helmut Katzgraber, Microsoft quantum principal research manager.

Microsoft, of course, is known for software. Maybe that means what the quantum computing industry needs is quantum Intel (INTC), pumping out the quantum equivalent of silicon chips with 1 billion transistors on them. (A transistor can store a bita one or zeroas information.)

For Katzgraber, the qubit hardware industry will be like FPGA, short for field programmable gate arrays, which are integrated circuits that can be configured into ASIC, short for application-specific integrated circuits.

Xilinx (XLNX) makes FPGAs. They get their supply from businesses like Taiwan Semiconductor Manufacturing (TSM), and Taiwan Semi gets silicon from a company like Lam Research (LCRX).

There is now a quantum value chain like that. Honeywell International (HON) can make trapped-ion qubits. That is probably as close as investors have to a quantum supplier at this point.

Hardware doesnt have to come before software and applications though.

We have gone through computer creation before, says Katzgraber. We are doing the whole stackthe software to the qubitsall at once.

That speeds development, but doesnt mean there will be a quantum smartphone soonor sooner than it took to go from mainframe to desktop, to laptop to iPhone. Quantum computing will probably look a little different. These [systems] will live in data centers in the cloud, adds Jordan.

Along with hardware comes apps. And a killer quantum app will help elevate the technology from MITs tech review to the nightly news. There are areas where the existing tech is having an impact. Julie Love, Microsoft quantum applications team leader, tells Barrons about several problems being addressed now from traffic light optimization to industrial catalyst for chemical production.

For now, big tech is big quantum. Google, Microsoft, IBM (IBM), and Amazon.com (AMZN) have quantum aspirations. Honeywell has its toes in quantum waters too. Its tough to buy any of those stock as a quantum investment yet.

Superconductor makers dont talk about quantum computing much in filings either. And superconducting is only a $2 billion industry at the moment.

Quantum computing remains a watch item for investorsalbeit an interesting one.

Write to Al Root at allen.root@dowjones.com

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Quantum Computing Explained for Investors - Barron's