quantum computing stocks - The Next Big Thing in Tech? 7 Quantum Computing Stocks to Bet On.

The next big thing in tech? 7 quantum computing stocks to bet on.

What will be the next big technological innovation? Some futurists have argued for quantum computing stocks.

Quantum computing aims to reinvent the future of advanced computing. Historically, computing power has grown at a predictable rate largely constrained by Moore’s Law. It is the observation that as the number of transistors on a semiconductor chip tends to double every two years, the cost of calculation drops by half. This has long governed the pace of innovation in the computer industry.

However, we are reaching physical limits to what smaller chip fabrication technologies can achieve. Moore’s Law cannot last forever. To provide additional exponential gains, a new computational technique will be needed. According Microsoft (NASDAQ:MSFT) fact sheet, “Quantum computers exploit the unique behavior of quantum physics – such as superposition, entanglement, and quantum interference – and apply it to computing.”

If successfully applied on a commercial scale, this new technique could offer breakthroughs in areas as diverse as artificial intelligence (AI), biotechnology, computational chemistry and autonomous driving. Here are seven quantum computing stocks that could benefit.

GOOG Alphabet $98.03
NVDA Nvidia $124.24
IBM IBM $120.77
MSFT Microsoft $236.92
TSM Taiwan semiconductor $69.12
RGTI Calculation of releases $1.90
IONQ IonQ $5.36

Alphabet (GOOG, GOOGL)

Source: Igor Golovniov / Shutterstock.com

Many discussions of quantum computing begin with Alphabet (NASDAQ:GOOGNASDAQ:GOOGL). In 2019, Google announced that it had achieved “quantum supremacy,” in which its Sycamore quantum computer achieved rapid computation of a problem that would take existing supercomputers thousands of years to complete.

This claim has since been criticized. In 2022, Chinese scientists responded, claiming that they had built a classical computer capable of performing the calculation in a similar time frame and outperforming Sycamore. As happens at the cutting edge of science, there remains a lot of rivalry and competition.

Either way, Google’s announcement sparked a land rush into the quantum computing space. Google is in a unique position in that while its Sycamore project is growing in success, it can leverage it into a wide variety of other futuristic Google projects such as AI, healthcare, and autonomous driving. It may take a long time for any quantum computing company to add much to Google’s revenue, given the scale of the basic search and advertising business in comparison. However, this stock is clearly part of the quantum computing conversation.

Nvidia (NVDA)

Close up of mobile phone screen with nvidia corporation logo on computer keyboard.  NVDA stock.

Source: Shutterstock

Nvidia (NASDAQ:NVDA) targets a number of next-generation technology applications. One of them includes quantum computing. Nvidia seems to present itself as sort of a pick and shovel to gain industry recognition.

It can do this by creating quantum simulations. Here’s the company’s explanation: “NVIDIA cuQuantum is an SDK of libraries and tools optimized to accelerate quantum computing workflows. With NVIDIA GPU Tensor Core GPUs, developers can use cuQuantum to accelerate circuit simulations. quantum based state vector and order of magnitude tensor network methods.

Quantum computing is unlikely to be the main driver of NVDA’s stock price in the near future. But it could add another catalyst to the company’s growth prospects over time.


Photo of the IBM (IBM) building seen through the canopy of a tree.  The IBM logo is in large letters on the side of the building.

Source: shutterstock.com/LCV

IBM (NYSE:IBM) has been working on developing its own quantum computing systems for some time. And it has had considerable success to date. Its Hummingbird computer system reached 65 qubits of operating capacity in 2020. IBM aims to exceed 1,000 qubits in the next two years. Qubit capacity is a key consideration for when this technology can achieve commercial viability.

Investors might be skeptical of IBM’s abilities here. After all, the company has long touted Watson, its AI-powered computer system that answers questions posed to it in natural language. Watson proved adept at winning at games such as chess and Jeopardy, but failed to achieve the levels of commercial notoriety that IBM’s stock bulls might have previously hoped for.

Will IBM’s quantum computing business follow a similar path? Only time will tell. However, IBM maintains a very profitable core business while being one of the most powerful research and development (R&D) teams in the world. Things like IBM’s quantum computing arm serve as upside options that could suddenly send IBM shares to a higher valuation.

Microsoft (MSFT)

Image of a corporate building with the Microsoft logo above the entrance.

Source: NYCStock / Shutterstock.com

Microsoft (NASDAQ:MSFT) was once known for missing several key technology trends, such as smartphones. However, it has become much better to lead new technology trends. The company’s early and powerful move to cloud services, with Azure, was exceptionally successful. And now Azure itself is giving Microsoft a foothold in quantum computing.

Microsoft is building a quantum ecosystem within Azure. Both through Microsoft’s own internal products and with its partners, Microsoft provides quantum computing solutions to its customers.

It’s easier for customers because they can access quantum computing solutions through their existing cloud offering instead of having to purchase a physical quantum computer. It also creates a huge lock-in for Azure in an increasingly competitive cloud computing industry.

Taiwan Semiconductor Manufacturing (TSM)

image of the TSM solid state office building

Source: various photographs / Shutterstock.com

Another thing we can be sure of is that today’s technology leaders won’t let innovation down. The Taiwanese government, to this end, announced an investment plan of $290 million in 2021 to develop future innovations in quantum computing.

If quantum computing really takes off, it would threaten Taiwan Semiconductor (NYSE:TSM) monopolistic position in current semiconductor manufacturing. So, Taiwan as a nation, and TSM in particular, are rightly investing to meet potential competition. It remains to be seen exactly what TSM’s long-term approach to quantum computing will be. But today it is a dominant player in computer technology and it invests in quantum.

Rigetti Computing (RGTI)

A conceptual image showing a quantum computer with a matrix background;  quantum computing

Source: Shutterstock

For the last two choices, we have pure quantum computing actions. It should be noted from the top that these two are much more risky than anything else on the list. These companies have yet to generate meaningful revenue or fully prove their business models.

Releases (NASDAQ:RGTI), in particular, is one of the two leading special purpose acquisition companies (SPACs) that recently entered the market in the field of quantum computing. Rigetti claims to have one of the most powerful quantum computing technologies on the market. And he has impressive research partnerships with organizations like the US Air Force and the Department of Energy.

Rigetti only generated $8 million in revenue in 2021 and is expected to bring in $13 million this year. The company is still years away from reaching a tipping point where it generates substantial business demand. However, for purely quantum computing stocks, Rigetti is one to watch.


A conceptual image of a processor representing quantum computing.

Source: Amin Van / Shutterstock.com

This is by far the most controversial choice on this list. IonQ (NYSE:IONQ) claims to have “the most powerful quantum computer in the world”. Short-selling firm Scorpion Capital, however, called the company a “brazen scam” in a comprehensive 183-page report. For investors who aren’t quantum physicists, it can be difficult to assess the merits of the company’s technology and the resulting short-seller claims.

What we do know is that IonQ has generated little revenue so far. Even by its own admission, it still has a long way to go before it develops enough qubits to generate substantial commercial demand and finally achieve profitability. However, it has also been easy for short sellers to seek out SPACs with unproven trading models. Many of Scorpio’s points about the company’s current finances could be correct without invalidating the company’s entire technology.

Either way, IONQ stock remains the market’s largest holding Quantum Defiance ETF (NYSEARC:QTY) at the time of writing, despite the controversy. For investors looking to speculate in a high-risk, high-reward quantum computing stock, IONQ stock is certainly cheaper today than it was a year ago.

As of press date, Ian Bezek held a LONG position in IBM shares. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

Ian Bezek has written over 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a junior analyst for Kerrisdale Capital, a $300 million New York-based hedge fund. You can reach him on Twitter at @irbezek.

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