- GOOGL, GOOG: Has just spun off will Sandbox, a new quantum computing business
- HON: Is leading innovations in quantum computing
- RGTI: Working to build multi-chip architecture
Quantum computing stocks are in the limelight, as the technology has tremendous potential to advance big data and artificial intelligence (AI). Analysts highlight that quantum computers could transform many industries, including finance, pharmaceuticals, energy, agriculture and telecom.
Recent metrics suggest the global quantum computing market could reach $9 billion in revenue by 2030, up from $260 million in 2020. Annual average growth is forecast to exceed 40% during the decade, with development gaining pace after 2025.
Regular InvestorPlace users may already know Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN) already provide quantum computing services with Azure Quantum and Braket, respectively. But other companies are also carving their niche in this market, and their stocks are compelling buys.
With that in mind, here are the three best quantum computing stocks to buy for lucrative returns through the decade.
Quantum Computing Stocks: Alphabet (GOOGL) (GOOG)
First on our list is Alphabet, the internet media giant with Google as one if its most prominent segments. Google’s primary interest in quantum computing comes from its leading role in internet search.
Alphabet issued fourth-quarter 2021 results on Feb. 1. Revenue increased 32% year-over-year (YOY) to $75.3 billion. Net income came in at $20.6 billion, or $30.69 per diluted share, up from $15.2 billion in the prior-year quarter. Cash and equivalents ended the period at $20.9 billion.
Management also announced an upcoming 20-for-1 stock split. Investors are now looking forward to July 1, the split date. Many retail buyers believe these events offer attractive investment opportunities.
In 2019, Google’s Sycamore quantum computing chips executed a task in 200 seconds that the company claimed would have taken a supercomputer 10,000 years to perform. The tech giant aims to create a “useful, error-corrected quantum computer” by 2029.
Understandably, Google will likely invest billions in developing the technology over the next decade. Management has just spun off its quantum computing unit, Sandbox.
GOOGL stock is up 36% over the past year, but down 3.9% since the start of 2022. Shares are trading at 24.2 times forward earnings and 7.3 trailing sales. The 12-month median price forecast for GOOGL stock is $3,500. After July 1, the stock price and analysts’ forecasts will change to reflect the split.
Honeywell International (HON)
52 week range: $174.42 – $236.86
Dividend Yield: 2%
Prominent technology name Honeywell manufactures numerous high-tech products, ranging from aerospace equipment to medical devices and advanced materials. In late November, it merged its Honeywell Quantum Solutions with Cambridge Quantum Computing to create Quantinuum, the largest quantum computing company in the world.
Wall Street expects Quantinuum to go public by the end of 2022. Investors also seem excited about Quantinuum’s first product, which involves a platform-agnostic and device-independent cybersecurity solution.
Honeywell announced Q4 2021 results on Feb. 3. Revenue declined 3% YOY to $8.7 billion. Net income came in at $1.43 billion, or $2.05 per diluted share, up from $1.36 a year ago. Cash and equivalents ended the period at nearly $11 billion.
HON stock is down almost 8% over the past year and 6.8% year-to-date. Shares are trading at 22.4 times forward earnings and 3.9 trailing sales. Meanwhile, the 12-month median price forecast for HON stock stands at $220.
Quantum Computing Stocks: Rigetti Computing (RGTI)
52-week range: $5.91 – $11.37
Rigetti Computing has become a pioneer of full-stack quantum computing. It has launched a multi-chip processor for scalable quantum computing systems.
Its Quantum Cloud Services (QCS) platform serves global enterprises, various agencies of the U.S. government and leading research centers. Several of them include the National Aeronautics and Space Administration (NASA), the U.S. Department of Energy and Palantir Technologies (NYSE:PLTR).
Management announced fiscal 2021 results on March 10. Revenue increased by 48% YOY to $8.2 million. Net loss widened to $38.2 million, or a $1.74 loss per share, compared with $26.1 million a year ago. Cash and equivalents ended the period at $11.7 million.
The tech name was founded in 2013 and went public on March 2. Rigetti completed a reverse-merger with Supernova Partners Acquisition Company II, a special purpose acquisition company (SPAC).
This deal valued the company at $1.5 billion. Rigetti has received $261.75 million from the deal to accelerate its development of multiple generations of quantum processors and expand its commercial operations.
However, since going public, RGTI stock has lost more than 20%. Meanwhile, the 12-month median price forecast for the stock stands at $19. Investors interested in a young company could consider researching Rigetti further.
On the date of publication, Tezcan Gecgil 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.