Stocks to buy

Quantum computing is still a relatively nascent technology. If developed properly, this technology will revolutionize a myriad of fields, including artificial intelligence (AI), cryptography and optimization. For investors who want to get in on the early innings of this powerful technology, we asked Bing ChatGPT for its top high-potential quantum computing stocks.

Taking a step back, let’s delve into what quantum computing is and how it is useful in the real world. Imagine you were part of a group of engineers and scientists who had to utilize a supercomputer to solve a complex problem. Perhaps, you are modeling the most optimal routes in a global shipping network for 100 liquified natural gas (LNG) tankers. What makes this problem complex is the large number of random variables to solve for. Weather patterns, for example, can behave randomly or stochastically.

When there is a plethora of stochastic variables to solve for, classical computing is more likely to hit a few speedbumps along the way. However, quantum computing leverages not just classical mechanics but also quantum mechanics to solve these kinds of problems faster.

Equity investors looking to profit from the untapped potential of this revolutionary technology should consider these AI-recommended quantum computing stocks.

IonQ (IONQ)

Source: Amin Van / Shutterstock.com

IonQ (NYSE:IONQ) is the first pure-play publicly traded quantum computing stock. The company gained much publicity after grossing $636 million from an initial public offering (IPO) via a special purpose acquisition company (SPAC) merger in 2021.

Last year, IonQ claimed to have the world’s most powerful quantum computer, dubbed “IonQ Aria.” This new quantum computer is based on trapped-ion technology and offers high fidelity along with scalability.

IonQ intends to manufacture quantum computers on an as-needed basis. It sells most of its quantum computing power through cloud services. In particular, the quantum computing company has partnerships with leading cloud providers such as Microsoft’s (NASDAQ:MSFT) Azure, Amazon (NASDAQ:AMZN) Web Services and Google Cloud, which enable customers to access quantum computing capabilities via the cloud.

IonQ’s share price has trounced that of most stocks this year, up nearly 300%. Much of this outperformance is related to the AI craze since quantum computing has many applications in artificial intelligence. However, the company is expected to grow revenue at a rapid rate, with analysts calling for 72% growth this year and 104% next year.

Microsoft (MSFT)

Source: The Art of Pics / Shutterstock.com

Software giant Microsoft (NASDAQ:MSFT) has its hands in all things technology, including labs dedicated to developing quantum computers. The company has one of the industry’s first full-stack, open-cloud quantum computing ecosystems, which enables data engineers to create quantum applications and run them on multiple systems.

In March 2023, Microsoft rolled out its new Integrated Hybrid feature in Azure Quantum that will allow the development of hybrid quantum applications utilizing both quantum and classical code seamlessly. What gives Microsoft an advantage is its established market position and ability to attract the best talent. As a result, Microsoft has a robust research team that is working on advancing quantum algorithms, software and hardware.

Microsoft’s stock has risen 44% YTD, driven by steady growth in its cloud computing platform Azure, which grew at a 27% clip in the first quarter. Microsoft is well-positioned to leverage its cloud infrastructure and software expertise to capture the quantum computing market.

Alphabet (GOOG, GOOGL)

Source: turbaliska / Shutterstock.com

In addition to being the parent company of Google, Alphabet (NASDAQ:GOOG, GOOGL) has a growing cloud computing segment and a large investment arm. The company also has been developing quantum computers since 2006 and achieved a milestone in 2019 when it demonstrated “quantum supremacy,” or the ability of a quantum computer to perform a task that is impossible for a classical computer.

Google’s quantum computer, called Sycamore, used 54 qubits to perform a calculation in 200 seconds that would take a supercomputer much longer to complete. Although some researchers have claimed to be able to do what Google’s Sycamore had done by using a normal supercomputer, Google is continuously working on improving its quantum hardware, software and algorithms. And the results are promising. The new version of Sycamore apparently can make calculations that would take supercomputers 47 years to complete.

Alphabet’s stock has gained 42% YTD, boosted by strong growth in its advertising and cloud businesses, along with its own successes in conversational AI.

On the date of publication, Tyrik Torres 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.

Tyrik Torres has been studying and participating in financial markets since he was in college, and he has particular passion for helping people understand complex systems. His areas of expertise are semiconductor and enterprise software equities. He has work experience in both investing (public and private markets) and investment banking.

Articles You May Like

Faraday Future (FFIE) Stock: To the Moon or Straight to Zero?