It’s certainly understandable why investors are excited about the future of quantum computing. Quantum computers are the next leap forward in computing power. Quantum computers use the power of quantum mechanics to solve certain problems that even the biggest and best classic supercomputers in the world can’t solve.
Quantum computers create multidimensional spaces to represent very large problems in a way classical supercomputers simply cannot. Quantum computers can even perform certain tasks in about one second that it would take a classic supercomputer a week to perform. Here are eight quantum computing stocks to buy, according to Wall Street analysts.
List of Best Quantum Computing Stocks to Buy
Microsoft Corp. (ticker: MSFT)
Microsoft Quantum, which the company calls “the world’s first full-stack, open cloud quantum computing ecosystem,” allows developers to build quantum applications and run them on multiple systems. In March 2022, Microsoft announced its Azure Quantum team has engineered devices that can produce quantum excitations that have been theorized by scientists but that don’t normally exist in nature.
Quantum computing may be a relatively small part of Microsoft’s overall cloud services and software business, but Bank of America analyst Brad Sills says there are plenty of other reasons to love Microsoft, including its high-growth Azure cloud services business and its potential to expand margins in coming years. Bank of America has a “buy” rating and $345 price target for MSFT stock, which closed at $237.92 on Sept. 23.
International Business Machines Corp. (IBM)
IBM introduced its flagship Q System One quantum computer back in 2019. In May 2022, IBM unveiled its updated road map to achieve large-scale, practical quantum computing, which includes a goal of building a 4,000-qubit processor with multiple clusters of modularly scaled processors by 2025. Bank of America analyst Wamsi Mohan says IBM is a defensive investment in a difficult environment for tech stocks given its high percentage of recurring revenue, its stable margins, and its solid balance sheet. Mohan expects IBM to continue to progress on its turnaround initiatives and gain market share in information technology spending. Bank of America has a “buy” rating and a $155 price target for IBM stock, which closed at $122.71 on Sept. 23.
Nvidia Corp. (NVDA)
Nvidia provides the processing power driving a wide range of cutting-edge technological innovations, including quantum computing. In July 2022, Nvidia unveiled its Quantum Optimized Device Architecture, or QODA, a hybrid quantum-classical computing platform designed to enable quantum-accelerated artificial intelligence, or AI, and high-performance computing. CFRA analyst Angelo Zino says Nvidia’s first Hopper-based graphics processing unit will help the company continue its data center momentum, and it will enter the central processing unit market with its Grace chips in 2023. In addition, Zino says Nvidia’s auto segment will rebound in coming quarters. CFRA has a “buy” rating and a $200 price target for NVDA stock, which closed at $125.16 on Sept. 23.
Alphabet Inc. (GOOG, GOOGL)
Google parent Alphabet built a 72-qubit quantum processor called Bristlecone back in 2018. In 2021, Alphabet opened a new quantum computing research and development lab and data center, and it plans to have a commercial quantum computing system available by 2029. In March, Alphabet spun off its Sandbox AQ commercial quantum computing and AI development subsidiary into its own private company. Zino says Alphabet can sustain a long-term growth rate in the low-teen percentage range and has an attractive valuation relative to other mega-cap tech stocks. CFRA has a “buy” rating and a $130 price target for GOOGL stock, which closed at $98.74 on Sept. 23.
Honeywell International Inc. (HON)
In November 2021, Honeywell merged its Honeywell Quantum Solutions with Cambridge Quantum, creating a large new quantum computing company called Quantum. Quantum recently upgraded its H1-1 quantum computer from 12 to 20 fully connected qubits. Investors can still get exposure to the company through Honeywell, which owns a 54% stake in Quantinuum. Morningstar analyst Joshua Aguilar says Honeywell is one of the strongest multi-industrial stocks in the market and is on track to generate revenue growth in at least the mid-single-digit percentage range and earnings per share growth in at least the low-double-digit percentage range. Morningstar has a “buy” rating and $231 fair value estimate for HON stock, which closed at $171.38 on Sept. 23.
Amazon.com Inc. (AMZN)
Amazon Braket is Amazon’s quantum computing service. In June 2022, Amazon announced the AWS Center for Quantum Networking to develop quantum network solutions. Amazon is also working on developing quantum computing technology at the Amazon Quantum Solutions Lab and the AWS Center for Quantum Computing. Quantum computing is a small part of Amazon’s business today, but that could change in the future. Bank of America analyst Justin Post says Amazon is well positioned as a market leader in long-term growth fields such as e-commerce, cloud computing, online advertising, and connected devices. Bank of America has a “buy” rating and a $170 price target for AMZN stock, which closed at $113.78 on Sept. 23.
Article was based on data from: How to Invest in Quantum Computing [+24 Stocks in 2022]
