Important Disclaimer: None of the content in the following article is written to be construed as financial and/or investment advice. All readers are strongly recommended to perform their due diligence before making any investments.
It has been over twenty years since the concept of quantum computing emerged. However, Wall Street has begun to develop a bullish outlook on the long-term prospects of quantum computing stocks as technological advances become increasingly noteworthy.
What is Quantum Computing?
Quantum computing is a branch of computer science focusing on developing novel technologies based on the principles of quantum mechanics, a fundamental theory in the field of Physics.
Given that the key objective surrounding this area of study is to generate significantly better performance for specific types of calculations ranging from quantum simulations in optimization, molecular chemistry, to prime factorization, advances in quantum computing may open up possibilities for major breakthroughs across various end markets to occur. As a matter of fact, some analysts have even postulated the potential of quantum computing to revolutionize numerous industries such as energy, telecommunications, finance, pharmaceuticals, and even agriculture!
Whilst traditional computers are more appropriate for simple processing works, quantum computers (i.e., machines utilizing quantum computing), on the other hand, provide the computational prowess that far surpasses those offered by traditional computers. This consequently enables quantum computers to perform complex tasks that are common in the field of quantum computing.
Put simply, the revolutionary properties of quantum computers may enable them to solve particular problems in a much more efficient manner compared to even the most powerful supercomputer at the point of writing. Much of this has been made possible due to the variance between traditional and quantum computers in terms of their core operating component. To elaborate, conventional computers are only capable of processing data via the binary system of 0’s and 1’s. Meanwhile, quantum computers employ a quantum mechanics theory known as superposition, accelerating their computation speed. As a result, quantum computers could, in theory, function with much more efficient algorithms and exponentially increase the states per unit of information it is capable of storing.
To illustrate an example, a supercomputer today will most likely require one trillion years to factor a 2,048-bit prime number. Conversely, processing this calculation is expected to only take approximately one minute if one uses quantum computers. Thus, quantum computing ought to be seen as a crucial enabler for industries demanding improved methods such as financial modelling, drug discovery, artificial intelligence (AI), big data, and many more.
Why Consider Investing in Quantum Computing Stocks?
With these in mind, it comes with no surprise that quantum computing stocks are currently in the spotlight amongst investors because their technology presents an enormous potential to accelerate humankind’s progress in so many sectors.
Based on a June 2022 article by McKinsey & Company, private and public funding for quantum computing continues to rise, with the amount of capital injected into quantum technology-focused start-ups having doubled from US$700 million in 2020 to US$1.4 billion in the following year. Meanwhile, four industries, namely automotive, chemicals, pharmaceuticals, and finance, are currently on track to emerge as the first few beneficiaries of such technology. In fact, the company has even predicted the potential of quantum computing to capture approximately US$700 billion in market value by 2035, with the highest-value use cases positioned around the life sciences and financial service sectors over the long term. Besides that, several of the most prominent technology and software conglomerates are already working to incorporate quantum computing into existing industries, such as aerospace and logistics. Examples of such companies include Amazon, Alphabet, Microsoft, and NVIDIA.
Nevertheless, it is still extremely important to understand that the quantum computing industry remains at an infancy stage, with nearly all companies, as mentioned earlier, still devising a strategy to generate material revenue from this sector (let alone profit). Hence, investing in any quantum computing stocks will require the individual to make a vital judgement call – that the company is capable of building practical quantum computers.
What Are Some of The Top Quantum Computing Stocks to Consider?
Although only a handful of companies purely focus on quantum computing, numerous technology-centric businesses are starting to invest heavily in this space. Here are three companies that are currently building their expertise in quantum computer development:
Honeywell International (NASDAQ: HON)
Honeywell is an industrial conglomerate that manufactures various high-tech products ranging from medical devices to aerospace equipment. In November 2021, the company merged its quantum computer services unit, Honeywell Quantum Solutions, with a quantum software start-up known as Cambridge Quantum Computing to form Quantinuum, which is the world’s largest quantum computing firm.
Quantinuum has been anticipated to become a public company by the end of 2022, with Wall Street drawing much excitement from the launch of Quantinuum’s first-ever product, which constitutes a device-independent and platform-agnostic cybersecurity solution.
Alphabet (NASDAQ: GOOGLE)
The artificial intelligence division within the internet media giant, Google, has a growing cloud computing segment called Sycamore. Sycamore’s quantum computing chips were reported to be able to execute a task that would be taken a supercomputer 10,000 years to complete within a mere 200 seconds in 2019. With that, the tech giant has indicated its interest in investing billions via its investment arm to develop the technology further, hoping to invent a “useful, error-corrected quantum computer” by 2029.
IonQ (NYSE: IONQ)
IonQ is the first-ever quantum computing start-up that became publicly listed through a special purpose acquisition company (SPAC) merger in early 2022. The company currently possesses one quantum computer in operation. It intends to use the funds raised from the SPAC merger to establish a network of quantum computers that can be accessed via several cloud services.
On top of that, IonQ’s strong interest in cloud computing has been demonstrated by its partnerships with notable technology players such as Amazon Web Services (AWS), Google Cloud, and Microsoft. Not to mention, the Japanese technology investor and telecommunications company, Softbank Group, has also made significant investments in IonQ and is actively collaborating with the management team to expand the coverage of their quantum computing technology to various other technology firms within its portfolio.
Looking forward, if the investment prospects of quantum computing stocks deeply interest you, do consider reading the articles by Quantum Insider, which is an excellent source of information to keep you well-informed of the ongoings within the quantum computing sector.