You may be short-sighted if you think generative artificial intelligence is the best thing happening to technology stocks this decade. There also are great opportunities right now in A-rated quantum computing stocks.
Quantum computing will surely change the computer industry as we know it. It will be the next great breakthrough in technology. Quantum computing uses computer hardware and algorithms to use quantum mechanics to solve problems that classic computers can’t touch.
Simply put, classic computers operate on chips that use bits for computations. The bits can show either a value of zero or one and a combination of zeros and ones used to complete tasks in modern computers.
But quantum computers operate at subatomic particles, such as electrons or photons. Quantum bits allow these particles to exist in more than one state (zero or one) simultaneously, greatly increasing processing speeds.
Quantum hardware is relatively new (roughly three decades) but we’re just now starting to see some inroads in everyday computing. According to a Zapata survey, more than two-thirds of companies with revenues of $250 million and computing budgets of at least $1 million are spending more than $1 million yearly to develop quantum computing applications.
The Portfolio Grader analyzed quantum computing stocks with the best fundamentals, earnings performance and momentum today. These are the best of the best A-rated quantum computing stocks to buy.
Here are seven that all get “A” ratings in the Portfolio Grader.
International Business Machines (IBM)
International Business Machines (NYSE:IBM) is perhaps the most established of the quantum computing companies.
In 2016 it put the first quantum processor on the cloud, which made it possible for anyone to run experiments. In 2019, it launched the first circuit-based commercial quantum computer, the Quantum System One.
The innovations keep coming. Its first universal quantum computer with over 1,000 qubits rolled out in 2023, as well as new modular quantum processors.
In December it announced Quantum System Two, its first modular quantum computer that it calls “the cornerstone of IBM’s quantum-centric supercomputing architecture.”
IBM has deep pockets for this research, which will surely continue to pay off down the road. The company has a market cap of nearly $170 billion and more than $13 billion of cash on hand to pour into research. And the stock is doing well, up 42% in the last year on the strength of $17.4 billion in revenue in the fourth quarter, up 4% from a year ago.
IBM stock gets an “A” rating in the Portfolio Grader.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) gets a lot of publicity and credit for its work in generative AI and its investment in OpenAI, the creator of ChatGPT. But its work with quantum computing is equally impressive.
Microsoft’s Azure Quantum is a cloud service that allows users to build and refine quantum algorithms. It includes tools to accelerate scientific discovery, as well as to use natural language to work through chemistry and materials sciences problems.
Microsoft’s advanced work with AI is notable when you consider the potential of quantum computing. As Forbes writes, “Quantum computing, an entirely new way of processing information, when combined with AI, has the potential, without exaggeration, to bring about a new computing revolution. Transformation may be an understatement.”
MSFT stock is up 60% in the last 12 months and gets an “A” rating in the Portfolio Grader.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) already is staking its claim as the most influential stock of the decade. NVDA stock is up 238% in the last year as the company closes in on the $2 trillion mark in market capitalization.
While Nvidia is known for its powerful graphics processing units that make generative AI possible, the company also has its Cuda Quantum platform, a first-of-its-kind open-source platform that allows developers to integrate and program quantum processing units, GPUs, and central processing units (CPUs) into a single system.
It’s impossible to ignore Nvidia’s efforts in quantum computing when you consider its massive success in creating the technology to power generative AI. Nvidia’s revenue in the fiscal fourth quarter was $22.1 billion, up 265% from a year ago, and the company brought in $60.9 billion in revenue for the full year.
Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ:AMD) is making some impressive gains this year up 20% so far in 2024 and 128% in the last 12 months as it finally starts competing with Nvidia in the generative AI market.
It partnered with the quantum computing company Riverlane, which is using AMD’s Zinq UltraScale+ RFSoC as a platform to act as an interface between Riverlane’s control software and the high-speed pulse lasers that are fired to control qubits.
AMD’s revenue in the fourth quarter was $6.16 billion, up 10% from a year ago. Net income jumped more than 3,000% to $667 million, and earnings per share rose from 1 cent a year ago to 41 cents per share in the most recent quarter.
AMD stock gets an “A” rating in the Portfolio Grader.
QuickLogic (QUIK)
Based in California, QuickLogic (NASDAQ:QUIK) makes low-power, multi-core semiconductor platforms and hardware for industrial, aerospace, defense, edge and endpoint AI, consumer, and computing applications.
Its subsidiary, SensiML, also makes AI and machine learning software. The company’s products are designed for mobile devices, such as those used by medical professionals, industrial workers and consumers.
The company also partners with Xiphera, which makes hardware-based cryptographic security products. Xiphera’s is implementing its xQlave quantum-secure cryptographic IP cores on QuickLogic’s eFPGA architecture.
The companies say the partnership will help keep products secure from quantum threats, which it says is the next step ahead in cybersecurity.
QUIK stock is up 123% in the last 12 months and gets an “A” rating in the Portfolio Grader.
Broadcom (AVGO)
Broadcom (NASDAQ:AVGO) makes semiconductors for data centers, networking, software, storage, wireless and industrial applications.
As a semiconductor manufacturer, Broadcom needs to be at the cutting edge of quantum computing research. That’s one of the reasons why it teamed up with the California Institute of Technology in a multi-year partnership to conduct quantum science research.
The Broadcom Quantum Laboratory at Caltech will support collaboration in quantum computing, sensing, measurement and engineering, and is scheduled to open next year.
Broadcom’s revenue in the fourth quarter was $9.25 billion, up 4% from a year ago. Net income was $3.52 billion and $8.25 per share, up from $3.35 billion and $7.83 per share a year ago.
AVGO stock is up 110% in the last year and gets an “A” rating in the Portfolio Grader.
Super Micro Computer (SMCI)
Super Micro Computer (NASDAQ:SMCI) has been on an amazing run in the last year. Its investments in quantum computing will help ensure that the company will continue to prosper as research and development of quantum computing continues to grow.
Supermicro works closely with chip manufacturers like AMD and Nvidia to design architecture, such as server racks and storage clusters, that will be important for companies building quantum computing products.
Its products include AI traThe company is supporting Nvidia’s HGX H200 8-GPUs systems to help it train larger language models in less time. It has more than 1,000 customers for its high-end servers that are helping to make machine learning, AI and quantum computing possible.
SMCI stock is up 750% in the last year, including nearly 200% in the first two months of 2024. It gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in MSFT, NVDA and SCMI. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
