Quantum computing is the future. And the future has arrived.
The quantum computing market is forecast to reach $2.2 billion by 2026, according to IQT Research. The number of installed quantum computers around the world is projected to reach 180 in 2026, with about 45 machines produced in that year alone. That’s a quantum leap forward from today. Quantum computers are now moving from academic theory to big business applications.
These supercomputers can solve complex problems that are beyond the capabilities of standard computers. And the technology is now at a point where it can be used for everything from commercial space flight to banking and finance. As we become more fully immersed in the world of Big Data, the amount of information that needs to be analyzed and stored is going to grow exponentially, and quantum computers will be the ones to process it all.
Here we look at four quantum computing stocks that will disrupt the world as we know it:
Quantum Computing Stocks: International Business Machines (IBM)
International Business Machines, better known as IBM, has long been at the forefront of quantum computing. One of the oldest computer companies in the world, Big Blue currently runs IBM Quantum, a division of the company that is designed to equip clients with practical quantum skills, and provide them with access to world-class expertise and technology to advance the field of quantum computing.
IBM scientists are working internally to advance foundational quantum computing research, all designed to offer real-world applications. Specifically, the company is leveraging experimentation, theory and computer science to explore new possibilities in quantum computing and push the envelope on the technology.
Some corporations are already lining up to work with IBM in the area of quantum computing, including automaker Daimler (ETR:DAI), which is exploring using IBM quantum simulation for battery development in its electric vehicles. Additionally, IBM recently unveiled an ambitious plan to build the most-powerful quantum computer possible within the next 10 years.
It will take time for quantum computing to make a meaningful contribution to IBM’s bottom line or IBM stock. But the future certainly looks bright.
IBM’s share price is up 28% from its March low to Monday’s $120.09 close, but has lagged the performance of many of its technology peers. The First Trust NASDAQ Technology Dividend Index Fund (NASDAQ:TDIV) is up 46% in the same period. IBM is the exchange-traded fund’s second-largest holding, at 7.47% weighting of the 85-stock portfolio.
Quantum computing could give the stock the shot in the arm shareholders have been looking for.
Alibaba (BABA)
What to say about Chinese technology behemoth Alibaba? There aren’t too many areas of cutting edge technology that Alibaba isn’t deeply involved in. From cloud computing to artificial intelligence, Alibaba is a global leader in all of it. So it should come as no surprise to learn that Alibaba is also immersed in quantum computing and finding ways to push the technology into the realm of commercial applications.
The company currently runs the “Alibaba Quantum Computing Laboratory,” which government officials and scientists in China refer to simply as “The Laboratory.” Alibaba’s research facility aims to take the study and applications of quantum theory to the next level, heralding new technologies and platforms that can be used commercially in the areas of information security, connectivity and data analysis and storage.
Specifically, Alibaba’s Laboratory is developing quantum computers that can provide ground-breaking security for banks and e-commerce companies, as well as data centers. The Chinese government is fully behind Alibaba’s work in quantum computing and has said that China should be a global leader in the area.
Alibaba is on its way to making that happen. The company currently has the second-most-powerful quantum computer in the world that’s publicly available, after one of IBM’s current machines.
BABA stock has jumped around a lot this year and currently trades at just above $270 a share. But analysts see the stock price skyrocketing as high as $2,324 a share in the next 12-months. Our advice? Buy the dip.
AT&T (T)
AT&T is another blue chip American company that is at the forefront of quantum computing.
The AT&T Foundry innovation center in Palo Alto, California has joined forces with the California Institute of Technology (Caltech) to create the Alliance for Quantum Technologies (AQT). The Alliance is focused on bringing industry, government, and academia together to speed quantum technology development and create practical applications for it.
AT&T is also working on a research and development program called named INtelligent Quantum NEtworks and Technologies (INQNET). The program is working on developing security in communications through future quantum networking technologies. AT&T has said that quantum networking will lead to a new era of super-fast, secure communications networks.
All this work bodes well for the future of AT&T and its shareholders. T stock remains more than 38% below its 52-week high of $39.55. At its current price of $28.62 a share, the stock looks pretty affordable.
Baidu (BIDU)
Baidu is a lesser-known Chinese technology company, but the multinational technology company that specializes in artificial intelligence is a significant player in quantum computing.
Beijing-based Baidu has its own institute for quantum computing dedicated to the application of quantum computing software and information technology. The “Baidu Quantum Computing Institute” is headed by Professor Duan Runyao, a world-renowned quantum computing expert. Duan has said that his plan is to make Baidu’s institute into a world-class institution and integrate quantum computing into the company’s various businesses, especially artificial intelligence.
In September of this year, Baidu unveiled “Quantum Leaf,” a cloud quantum computing platform designed for programming, simulating and executing quantum computer workloads. Quantum Leaf’s aim is to offer a programming environment for quantum-infrastructure-as-a-service set-ups. Baidu sees programming as a natural application for quantum computing.
BIDU stock is up 62% from its March low at $133.04 currently. Baidu, which operates the largest internet browser in China, looks to have a bright future.
On the date of publication, Joel Baglole held a long position in BABA.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
