SPECIAL REPORT The Top 7 Stocks for 2024

Frontiers in Quantum Computing: 3 Stocks Leading the Way

Advertisement

  • Each of the quantum computing stocks below is a solid bargain.
  • International Business Machines (IBM): Reporting a key quantum computing development this week, its solid yield makes it a long-term hold.
  • Alphabet (GOOG, GOOGL): Alphabet has some of any quantum computing stock’s best efficiency and productivity metrics.
  • Microsoft (MSFT): The 48-year-old company takes a high-risk, high-reward approach to R&D, which could pay off in spades.
quantum computing stocks - Frontiers in Quantum Computing: 3 Stocks Leading the Way

Source: Shutterstock

Quantum computing stocks should be on your radar. The vast potential of quantum technologies means we’ll likely witness dramatic progress in AI, IoT, and clean energy technologies. These computers will give us the needed horsepower, but the tech is presently under a competitive research and development environment.

Regardless of the speculative nature of quantum computing stocks, we can already observe leaders. These companies are heading the pack in pioneering this new standard for the computing industry.

So, to know the three quantum computing stocks leading us forward, let’s explore your best options.

International Business Machines (IBM)

Photo of IBM (IBM) building as seen through the canopy of a tree. IBM logo is in large letters on side of building.
Source: shutterstock.com/LCV

IBM (NYSE:IBM) warrants attention foremost.

Most recently, the company installed a 127-qubit quantum processor in its IBM Quantum System One machine at the University of Tokyo, Japan.

This significant development is not only one of the first quantum computers in East Asia, but also it challenges other regions for market dominance. Typically led by Europe and North America, this sets the stage for Asia to emerge as a pivotal player. And this may have critical competitive considerations for companies like IBM.

IBM’s processor is expected to conduct high-level research in various fields ranging from finance to medicine to modeling complex biological processes.

Besides this recent development that should give quantum bulls a reason to smile, IBM is also undervalued on several key metrics. It effectively balances strong cash generation with a dividend yield of 4.14% and a price/earnings-to-growth (PEG) ratio of 0.43.

Alphabet (GOOG, GOOGL)

Alphabet Inc. (GOOG, GOOGL) and Google logos seen displayed on a smartphone
Source: IgorGolovniov / Shutterstock.com

Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) position in the quantum computing market is also formidable. The company made significant headway in February by reporting that it reduced computational errors in its quantum bits. Reducing these errors is crucial to making quantum computers usable and a key barrier to commercialization.

Complementing Alphabet’s goal of commercializing its quantum system this year is its impressive financials. Like IBM, its PEG ratio is 1.26, indicating expected growth at a reasonable price. Furthermore, it has retained robust top and bottom lines with a revenue of $297.13 billion and a net income of $66.73 billion.

Also, Wall Street’s stance on Alphabet remains bullish. It carries a strong buy recommendation. Further, analysts predict an average 12-month price increase of 7.32%, with a high target of $180.

Microsoft (MSFT)

ChatGPT logo seen on the smartphone, Microsoft (MSFT) logo seen on the laptop. Microsoft Copilot
Source: Ascannio / Shutterstock.com

Microsoft (NASDAQ:MSFT) is building an ecosystem to support its quantum computing services with its Q# development suite. Also, it onboards developers early to test its code and tools. 

Therefore, the development of MSFT’s community is one of the key reasons to be bullish on MSFT. Q# is striving to become the de facto standard. In fact, it’s similar to the way certain programming languages once fought for dominance amongst the development community. Today, we are left with a handful of the most popular.

Further, MSFT is taking a calculated gamble on its development of quantum technology. It’s investing heavily in research and developing novel ways to improve error correction and fault tolerance. This approach is riskier, but if it pays off. It could give MSFT one of the most stable quantum computing systems on the market upon release, if not the most stable, thus giving it a significant advantage over its peers.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.


Article printed from InvestorPlace Media, https://investorplace.com/2023/12/frontiers-in-quantum-computing-3-stocks-leading-the-way/.

©2024 InvestorPlace Media, LLC