In this article, we will take a look at the 10 best quantum computing stocks to buy. If you want to see more stocks in this selection, go to the 5 Best Quantum Computing Stocks To Buy.
Complicated and large-scale issues can be solved by quantum computers through the creation of multidimensional spaces in a variety of fields and applications, such as banking, transportation, chemicals, and cybersecurity. This is not possible for supercomputers as they process the information on a bit-by-bit basis. Although the world of quantum computing has been developing for the past two decades, the industry gained mainstream recognition on Wall Street when numerous companies that offered pure-play exposure to the industry became public in 2021. According to research by McKinsey, compared to 2020, funding for companies using quantum technology increased by more than twofold, reaching $1.4 billion in 2022.
However, it must be noted that the quantum computing industry is still in its infancy stage, and investments are being made in the research and development (R&D) of the technology. The advancement in the field of cloud computing has benefitted the quantum computing industry as it is making quantum computing capabilities more accessible to researchers and software developers. According to a report issued by Research and Markets, the size of the enterprise quantum computing market is expected to rise from an estimated value of $2.74 billion in 2022 to $11.45 billion in 2027. This would reflect a compound annual growth rate (CAGR) of 33.1%.
An Expanding Ecosystem
According to McKinsey, the field of quantum computing is advancing at a rapid pace and is on its way to achieving widescale commercial viability. Leading companies like Amazon.com, Inc. (NASDAQ:AMZN), Alibaba Group Holding Limited (NYSE:BABA), International Business Machines Corporation (NYSE:IBM), and Microsoft Corporation (NASDAQ:MSFT) have already launched their cloud services based on quantum computing. The leading management consulting firm adds that the chief information officer (CIO) and other leaders in prominent organizations are keeping an eye out on the news related to quantum computing and trying to incorporate this emerging trend into their growth strategies. It is widely believed that the industries that adopt this technology early will be able to reap benefits as early as 2030.
Quantum computing is also receiving a boost from the public sector in the form of higher funding. This is evident by the fact that China, the European Union, and the US have invested a cumulative $23.5 billion in the advancement of quantum computing as of 2022. Based on the use cases found by McKinsey, the stake of quantum computing in the automotive, chemicals, finance, and pharmaceutical industries could be valued at around $300 billion to $700 billion. Experts think that in the pharmaceutical industry, quantum computing could significantly reduce the R&D time for new drugs and make the process more efficient. Some of the best quantum computing stocks in the market currently include NVIDIA Corporation (NASDAQ:NVDA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT).
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Our Methodology
We have discussed the business fundamentals and growth strategies of these companies in addition to the analyst ratings. We have shortlisted some of the best pure plays in the quantum computing industry and leading tech players providing exposure to the quantum computing field. The stocks have been ranked using Insider Monkey’s database of 920 hedge funds as of Q3 2022.
Best Quantum Computing Stocks To Buy
10. Quantum Computing, Inc. (NASDAQ:QUBT)
Number of Hedge Fund Holders: 1
Quantum Computing, Inc. (NASDAQ:QUBT) is a Leesburg, Virginia-based developer of quantum computing-related hardware and software that is focused on establishing real-world applications of the technology.
The main offering of the company is Qatalyst, which is a “quantum application accelerator” that aids companies in solving complex computational products by employing a wide variety of techniques related to computational and quantum computing. The platform is used in industries like finance, healthcare, and supply chain.
Analysts think Quantum Computing, Inc. (NASDAQ:QUBT) is trading at a discount compared to its industry rivals, providing investors an attractive opportunity to go long on the stock. Furthermore, the company’s business model is flexible and is more de-risked compared to its competitors. Quantum Computing, Inc. (NASDAQ:QUBT) also has strategic partnerships with notable organizations like Amazon.com, Inc. (NASDAQ:AMZN) and Splunk Inc. (NASDAQ:SPLK). Experts believe that Quantum Computing, Inc. (NASDAQ:QUBT) is amongst the leading companies in the quantum computing space.
9. Arqit Quantum Inc. (NASDAQ:ARQQ)
Number of Hedge Fund Holders: 3
Arqit Quantum Inc. (NASDAQ:ARQQ) is a London, UK-based company that employs the power of quantum computing to provide unique encryption services through its platform-as-a-serve (PaaS) platform. The platform secures the communication between two networked devices from any threat, even from a quantum computer. The company achieves this by offering QuantumCloud software that can be downloaded on any device.
Experts believe that Arqit Quantum Inc. (NASDAQ:ARQQ) is set to benefit from the secular trends offered by quantum encryption, which is forecasted to have a total addressable market (TAM) of $230 billion by 2025. The cybersecurity industry is expected to undergo a transformation due to the advancements in quantum computing technology, benefitting a company like Arqit Quantum Inc. (NASDAQ:ARQQ). Experts anticipate Arqit Quantum Inc. (NASDAQ:ARQQ) to generate a top line of $660 million with an EBITDA of $477 million by FY25 as it owns a proprietary technology that is in high demand.
LMR Partners was the leading hedge fund investor in Arqit Quantum Inc. (NASDAQ:ARQQ) during Q3 2022.
8. D-Wave Quantum Inc. (NYSE:QBTS)
Number of Hedge Fund Holders: 9
D-Wave Quantum Inc. (NYSE:QBTS) is a Burnaby, Canada-based quantum computing company founded in 1999. The company went public in August 2022 through a merger with a special purpose acquisition corporation (SPAC) and became the third company from the quantum computing industry to go public in the last 12 months.
D-Wave Quantum Inc. (NYSE:QBTS) considers itself the only provider of end-to-end quantum services, starting from the development and delivery of quantum systems to providing application development tools and cloud services based on quantum computing. In a research note issued to investors on November 10, Suji Desilva at Roth Capital assigned D-Wave Quantum Inc. (NYSE:QBTS) a target price of $10 and reiterated a Buy rating on the stock. The analyst highlighted that the company’s Q3 2022 top-line and bottom-line results reflect continued sequential growth.
The growth is being driven by an increasing number of customers that are interested in acquiring a Quantum Computing as a Service (QCaaS) platform to operate quantum-based applications. The expectations of growth are anticipated at a time when the broader macroeconomic circumstances are tough, making D-Wave Quantum Inc. (NYSE:QBTS) one of the best quantum computing stocks to invest in.
7. Quantum Corporation (NASDAQ:QMCO)
Number of Hedge Fund Holders: 11
Quantum Corporation (NASDAQ:QMCO) is a San Jose, California-based company that uses quantum computing to secure videos and other sources of unstructured data.
The company posted its Q2 FY23 results on November 2. Revenue increased by 6.3% YoY to $99.1 million, outperforming the consensus forecast of $94.53 million. The company’s subscription revenue grew for the sixth consecutive quarter, with the number of subscribers rising from 455 to 554 in Q2. Furthermore, Quantum Corporation (NASDAQ:QMCO) bookings increased twofold on a quarterly basis, reaching a record peak backlog of $96 million at the end of the quarter. Quantum Corporation (NASDAQ:QMCO) also provided strong guidance as it anticipates revenue for Q3 FY23 to be in the range of $100 million to $106 million as opposed to the consensus estimate of $103 million. Experts think the company is well-positioned to benefit from the increasing applicability of its services, making it one of the best quantum computing stocks to buy.
Quantum Corporation (NASDAQ:QMCO) was held by 11 hedge funds at the end of Q3 2022.
6. IonQ, Inc. (NYSE:IONQ)
Number of Hedge Fund Holders: 16
IonQ, Inc. (NYSE:IONQ) is a College Park, Maryland-based developer of trapped-ion quantum computers with a strong history of two-and-a-half decades.
In an update issued to investors on November 16, David Williams at Benchmark gave IonQ, Inc. (NYSE:IONQ) stock a Buy rating with a target price of $8. The target price reflects a potential upside of over 65% from the closing price as of December 6. The analyst noted that IonQ, Inc. (NYSE:IONQ) reported another stellar quarter that reflected continued progress as it posted its Q3 2022 results on November 14. Mr. Williams added that IonQ, Inc. (NYSE:IONQ) is on its way to meeting all the important commercial milestones. The company recorded new bookings of $16.4 million, taking the total bookings to $21.2 million at the end of the third quarter. This puts IonQ, Inc. (NYSE:IONQ) on track to meet its annual bookings target of $23 million to $27 million. The company also maintained its FY22 guidance in a challenging and uncertain macroeconomic environment. The analyst thinks that in the field of quantum computing, IonQ, Inc. (NYSE:IONQ) has established a pathway for its growth and sustainability through significant breakthroughs in a short period of time.
As of Q3 2022, IonQ, Inc. (NYSE:IONQ) was held by 16 hedge funds.
In addition to IonQ, Inc. (NYSE:IONQ), companies like NVIDIA Corporation (NASDAQ:NVDA), Intel Corporation (NASDAQ:INTC), and Microsoft Corporation (NASDAQ:MSFT) are also some of the leading companies in the quantum computing industry.
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Disclosure: None. 10 Best Quantum Computing Stocks To Buy is originally published on Insider Monkey.
