Finding the best quantum computing stocks to buy is critical because this is clearly the next big industry.
Quantum computers promise to bring the power of quantum mechanics to bear in solving our most vexing problems. They may be capable of processing more data, faster, than any classical computer.
If all that happens, then quantum computing stocks may bring generational wealth to their investors.
Quantum computers are unique in that they use qubits rather than classical bits. These qubits are fundamentally quantum mechanical, and do not have a defined value until measured. Qubits can be made out of a variety of materials, but as of now there is no consensus of how best to make a qubit within the industry. Who’s qubit becomes the standard will have a big impact on who wins and loses in the quantum race.
Because of this, it’s important to understand the science as well as the finance of quantum computing companies. What type of qubit they plan to use, and how they plan to deploy it in order to overcome quantum noise and other issues, will be central to whether a company survives and prospers.
But for the companies that do prosper, they could be the founders of a new trillion dollar industry. With that said, here are some of the best quantum computing stocks to buy.
IonQ (NYSE:IONQ) plans to use small, modular quantum computers and network them together to solve big problems.
Their latest offering is the 32 qubit IonQ Forte, built using trapped ions as qubits. While 32 qubits seems low, IonQ hopes the modular design will allow multiple systems to work in parallel. That could help to overcome quantum noise, and allow limitless scaling to meet the needs of any user.
IonQ is also making headway in bringing its computers to the masses. They’ve partnered with Amazon to bring the 25 qubit IonQ Aria to Amazon Braket. Amazon Braket is an Amazon Web Service for quantum computing.
This means that programmers can now work on developing software and services on IonQ computers more easily than before. This will give IonQ a leg in in the race to become the standard for quantum ecosystems
IonQ is still a small company, so an investment here could yield very large gains. But it is still somewhat speculative relative to the competition.
In Q1 2023 it had just $4.2 million in revenue, and a net loss of $27 million. It does have $51 million in cash and $336 million in investments, so it still has plenty of runway to survive. But it will eventually need real revenue in order to justify its valuation.
IonQ’s partnership with Amazon is a good first step towards getting itself available to the public. If they can build off this success, they’ll prove themselves one of the best quantum computing stocks of our generation.
Intel (NASDAQ:INTC) may seem an unusual bet for the quantum computing industry, but their recent moves make them an enticing one.
They’ve recently released a software development kit (SDK) for quantum computers, for starters. This SDK simulates how a quantum computer will act, and allows programs to write and debug programs for quantum computers.
Even though current quantum computers are rare and difficult to maintain, this lets software developers get a head start in developing applications.
Intel is building itself as a real competitor for developing the chips that will run future quantum computers. They are developing their capacity to produce quantum dots at the scale and purity necessary to be used as qubits.
Quantum dots are just one way companies are trying to make qubits, but if Intel’s process is successful it could become the standard. That would make Intel a big player in the future quantum chip industry.
Intel’s biggest strength is its background in computer chips.
One of their weaknesses is that there is not yet a standard for producing quantum qubits, and the quantum dots they are working on might not get used by other quantum computing companies.
Compounding this is the fact that their cash flow has suffered as the chip shortage has eased. In Q1 2023 they had revenue of $11.7 billion and a net loss of $2.8 billion.
But quantum chips could provide a path back to profit, and their quantum dots bet is one of the most promising paths forward for the industry.
Like IonQ, Honeywell is using trapped ions to power its quantum systems. But Honeywell is also pushing the boundaries of science in ways that could truly solve the problem of quantum error correction.
The biggest unsolved problem in quantum computers isn’t how to make a qubit, it’s how to make a qubit that holds data for any significant length of time.
The bits of classical computers are exceptionally stable, but the qubits of quantum computers are liable to lose their information content if they interact at all with outside particles.
Qubits losing their information introduce errors into the computer program. And so quantum error correction is necessary to keep quantum programs running smoothly.
Recently though, Honeywell achieved what could be a quantum leap in quantum error correction. Quantinuum, held jointly by Honeywell and Cambridge Quantum Computing (privately held), has created a topological quantum state which could be the key to solving quantum error correction.
Solving quantum error correction is essential for any quantum computer to achieve widespread adoption. Quantinuum’s achievement puts it at the forefront in the race to broadly commercialize quantum computers.
Honeywell is also a safe haven for investment even apart from their quantum computers. In Q1 of 2023 they had $8.9 billion in revenue and $1.4 billion in net income. Quantum computing was only a tiny part of that.
The advances from Quantinuum could change all that. And that could make Honeywell one of the best quantum computing stocks to buy.
On the date of publication, John Blankenhorn did held a long position in Intel. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.