Quantum computers could potentially revolutionize multiple industries with their unparalleled efficiency and scalability compared to transistor-based CPUs. Analysts point to an estimated $125 billion market up for grabs by the conclusion of the current decade. Therefore, quantum computing stocks to buy offer tremendous upside ahead, with a sector poised for a staggering 37% annualized growth rate through 2030.
Quantum computers can effectively tackle complex and large-scale problems across various sectors, including transportation, chemicals, banking, and others, attracting substantial investment. Moreover, Wall Street’s spotlight turned to this burgeoning sector in 2021. Furthermore, according to McKinsey’s research, quantum technology companies secured a whopping $1.4 billion in funding in 2022, more than doubling the previous year’s figure.
Despite its promising future, the sector is still in its nascency, with investments primarily focused on research and development. With that in mind, let’s consider the three most promising quantum computing stocks to buy this month.
Quantum Computing Stocks to Buy: IBM (IBM)
IBM (NYSE:IBM) is one of the top quantum computing plays, which boasts an incredible line-up of products in the sector. It boasts over 20 of the most powerful quantum computing systems, with its most recent 433 qubits release.
In 2016, it released its first publicly available codable quantum computer, following up the IBM Falcon in 2019. The Falcon is the first commercially available quantum computer, which has become the most popular system to date. Moreover, IBM plans to release its much-talked-about Condor computer, which can effectively handle 1,121 qubits. Over the next couple of years, the company plans to have a processor with a whopping 4,158 qubits.
Though quantum computing represents just a small part of IBM’s business, IBM stock could move independently in line with the expansion in the quantum computing space.
IonQ (NYSE:IONQ) is arguably the best pure-play in the quantum computing space. The firm is developing trapped-ion quantum computers that can be used effectively for general use and has partnerships having a profound impact on its financials. Many of these partners have massive cash war chests, including Microsoft (NASDAQ:MSFT) and Dell (NYSE:DELL).
Revenues for the firm have been rising tremendously each quarter, with sales rising 130.9% from the fourth quarter of last year to the fourth quarter of 2022. Moreover, its gross margins stand at a remarkable 76.3%, with the firm recently announcing the completion of its 32-qubit quantum computer.
Furthermore, it has a robust balance sheet with $355 million in cash and short-term investments. With this stockpile, the company can effectively weather the economic volatility for the foreseeable future and continue pushing toward long-term expansion.
Taiwan Semiconductor (TSM)
As the quantum computing revolution gains momentum, semiconductor giant Taiwan Semiconductor (NYSE:TSM) has made impressive strides to stay ahead of the curve. Semiconductors are critical components in quantum computing, facilitating the creation of advanced processors. With TSMC’s leading position in the chip sphere, it has the potential to become a major player in the quantum computing space.
Furthermore, in its unique collaboration with Taiwan’s Ministry of Science and Technology, the firm has unveiled a state-of-the-art cloud computing platform that effectively unlocks the potential of quantum algorithms for businesses. This fruitful partnership is expected to span nearly five years, positioning the company as a trailblazer in this evolving space.
Its underlying business remains incredibly robust, with it generating an incredible 16% and 17% growth in sales and EBITDA, respectively, over the past five years. The semiconductor shortage led to a hefty margin bump this year, with the company aiming for 15% to 20% sales growth in U.S. dollar terms. Moreover, it also targets profit margins north of 50%, with an impressive return on equity of over 25%.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.