Summary: Quantum computing represents a monumental shift in computational capabilities, harnessing quantum mechanics to process data in ways previously deemed impossible. Luckily for investors, top quantum computing stocks are now accessible on major exchanges through regulated brokers, such as Interactive Brokers.
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What is quantum computing?
Quantum computing is a branch of computing that uses principles of quantum mechanics to process information. Unlike classical computers, which use bits (0s and 1s) to store and process data, quantum computers use quantum bits or “qubits.” Qubits can exist in a superposition of both 0 and 1 states simultaneously, allowing quantum computers to perform multiple calculations at once.
This innate ability to carry out complex calculations at speeds surpassing current technology positions quantum computing as a potential game-changer, ready to tackle problems still beyond the reach of traditional computers.
Top 5 quantum computing stocks to buy
As this nascent technology inches closer to practical applications, savvy investors are on the lookout for opportunities to capitalize on its transformative potential. So, if you’re among those keen to tap into the quantum surge, you’re in the right place. We’ve curated a list of the top 5 quantum computing stocks that are not only pioneering advances in the field but also presenting compelling investment propositions. They are:
- Microsoft (NASDAQ: MSFT);
- IBM (NYSE: IBM);
- Rigetti Computing (NASDAQ: RGTI);
- IONQ (NYSE: IONQ)
- Quantum Computing (NASDAQ: QUBT).
To securely invest in any of these quantum computing stocks, we recommend Interactive Brokers (IBKR), which offers:
- Commission-free stock and ETF trading;
- Trade stocks on 90+ market centers;
- Fractional stock trading;
- Earn extra income on fully paid shares;
- Lowest financing rates for margin accounts in the industry;
- No account minimum.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
Now, let’s dive in deeper. And stay tuned as we unveil a bonus option for investing in quantum computing stocks.
1. Microsoft
The company’s quantum computing exposure: Diversified with the technology sector
2023 Q4 Market capitalization: $2.79 trillion
A tech titan that needs little introduction, Microsoft (NASDAQ: MSFT) has steadily marked its presence in the quantum computing landscape. With a holistic approach encompassing hardware, software, and research, the company is not just skimming the surface but diving deep into the quantum realm. Additionally, through its cloud service, Azure, Microsoft offers quantum computing resources to researchers, broadening access to this emerging technology.
While quantum technology might not significantly impact Microsoft’s bottom line in the immediate future, the company is committed to advancing this next-generation computing technology. Historically, Microsoft’s stock has demonstrated consistent growth, reflecting its solid position in the tech industry. Indeed, their ongoing ventures in quantum computing only bolster their profile as a sound investment choice for those looking to the future of technology.
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2. IBM
The company’s quantum computing exposure: Diversified with the technology sector
2023 Q4 Market capitalization: $149.39 billion
A certified veteran in the technology sector, IBM (NYSE: IBM) has made significant advances in quantum computing. The company offers commercially viable quantum chips and systems through its dedicated IBM Quantum business unit. Their quantum solutions are currently employed by over 210 diverse entities, from financial institutions and car manufacturers to energy providers, underscoring the versatility and reach of their quantum offerings.
Furthermore, IBM has recently partnered with Raytheon Technologies (NYSE: RTX) to harness artificial intelligence (AI) and quantum computing for the aerospace, defense, and intelligence sectors. This partnership positions the US government as a primary beneficiary, signaling IBM’s strategic alignment with key industries. With its dual focus on cloud and quantum computing, coupled with its strategic alliances, IBM offers investors a promising gateway into the future of technology.
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3. Rigetti Computing
The company’s quantum computing exposure: Targeted
2023 Q4 Market capitalization: $142 million
Operating as an integrated systems company, Rigetti Computing (NASDAQ: RGTI) prides itself on crafting both quantum computers and the cutting-edge superconducting quantum processors that fuel them. Their Quantum Cloud Services (QCS) platform further amplifies their market presence, allowing seamless integration of their quantum machines into any cloud environment, whether it’s public, private, or hybrid. For investors with an eye on the fusion of quantum and conventional computing, Rigetti offers a promising venture into this groundbreaking tech frontier.
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4. IonQ
The company’s quantum computing exposure: Targeted
2023 Q4 Market capitalization: $2.54 billion
In 2021, IonQ (NYSE: IONQ) made headlines by becoming the first quantum computing pure-play stock to go public (via a merger with the SPAC dMY Technology Group III). As a start-up focused solely on quantum computing development, IonQ is at the vanguard of the industry. Their innovation extends to both the development of quantum computing hardware and its accessibility. Impressively, IonQ is the only company to offer its quantum computing systems across all major public cloud services.
IonQ’s cloud-first strategy is underscored by its partnerships with tech giants like Microsoft, Amazon’s Web Services (AWS), and Google Cloud. Their collaborative ventures aren’t limited to cloud providers either; they have attracted investment and partnership from the renowned Japanese telecom and tech investor Softbank Group. This partnership aims to leverage IonQ’s capabilities, like their powerful Aria computer accessible via Amazon AWS, across Softbank’s vast tech portfolio.
However, it’s essential to understand the company’s current financial landscape. While IonQ is making strides in quantum computing, it currently generates minimal revenue and isn’t profitable. They are poised for considerable investment in R&D and market positioning in the upcoming years. Potential investors should note that while IonQ offers a unique opportunity in the quantum sector, it comes with inherent risks associated with start-up ventures. If IonQ achieves its ambitious vision, it could become a lucrative quantum computing investment, but due diligence and caution are advised before diving in.
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5. Quantum Computing Inc.
The company’s quantum computing exposure: Targeted
2023 Q4 Market capitalization: $66.58 million
Positioning itself as a pioneer in both quantum software and hardware, Quantum Computing Inc. (NASDAQ: QUBT) is steadfast in its goal of harnessing quantum computing’s immense power to drive tangible business solutions. The company’s recent acquisition of QPhoton, an innovator in quantum photonics, is especially noteworthy. QPhoton’s development of a series of quantum photonic systems (QPS) complements QCi’s own flagship software product, Qatalyst.
This synergistic union equips QCi with a comprehensive toolkit, paving the way for an accessible and cost-effective full-stack quantum solution. Remarkably, their offerings are designed such that even non-quantum experts can leverage them, making QCi a compelling choice for investors eyeing real-world quantum applications.
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Bonus option: Defiance Quantum ETF
The company’s quantum computing exposure: Diversified within the quantum computing industry
2023 Q4 Assets under management: $184 million
For those who prefer a more diversified approach to investing in the quantum computing arena, an exchange-traded fund (ETF) might be the perfect fit. Instead of betting on individual stocks, an ETF offers a broader exposure to the sector, spreading the risk and potential reward across multiple companies.
Our top pick in the ETF category is Defiance Quantum ETF (NYSE: QTUM). This ETF encompasses 71 distinct stocks, mainly from semiconductor and software industries involved in quantum computing ventures. Despite its niche focus, the fund manages a modest sum, overseeing assets totaling approximately $184 million. Its three dominant holdings include IONQ, Rigetti Computing, and Nvidia.
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Uses of quantum computing
Some of the areas where quantum computing could be incredibly useful include:
- Cryptography: Quantum computers could potentially decrypt many of the systems we rely on for online security. However, they could also lead to the creation of new, quantum-resistant cryptographic methods;
- Drug discovery: Quantum computers can simulate complex molecular and chemical reactions with high precision. This capability can aid in the design of new drugs and the understanding of biological processes;
- Optimization problems: Tasks like finding the most efficient route for delivery trucks, optimizing financial portfolios, or even training machine learning models can benefit from quantum computing’s parallel processing capabilities;
- Material science: By simulating quantum systems directly, quantum computers can help in the discovery of new materials with desired properties, like superconductors at higher temperatures;
- Artificial intelligence: Quantum computing can accelerate machine learning algorithms, potentially leading to faster model training and improved AI capabilities;
- Financial modeling: They can be used to compute complex financial models in real-time or to identify arbitrage opportunities faster than classical computers;
- Climate modeling: Quantum computers could help create more detailed and accurate models of our planet’s climate, enhancing our understanding of environmental changes.
It’s worth noting that while there’s tremendous potential, practical and scalable quantum computing is still in its early stages. Many of the above applications are still theoretical or in the early research phases. However, as the technology matures, its impact on these sectors is expected to be transformative.
Pros and cons of investing in quantum computing stocks
Pros
- Huge potential for growth: Quantum computing promises to revolutionize various industries, from healthcare to finance. If and when quantum computers become mainstream, early investors stand to gain significantly;
- Diversification: Adding quantum computing stocks to one’s portfolio can offer diversification, especially if the investor believes in the tech sector’s future potential;
- Innovation catalyst: Quantum computing can potentially be the next big thing in technology, much like the internet in the late 20th century. Getting in early might offer a front-row seat to this transformative phase;
- Government and corporate interest: Many governments and large corporations are investing heavily in quantum computing research and development. This interest can provide a stable base for the industry’s growth.
Cons
- High risk: The quantum computing industry is still in its infancy. Investing now means banking on the technology’s future success, which is uncertain;
- Long time horizon: It might take years or even decades for quantum computing to become commercially viable and for companies to start seeing significant profits;
- Technical complexity: The underlying technology is complex, and not all investors might fully grasp the nuances. This lack of understanding can lead to misinformed investment decisions;
- Penny stocks: Many quantum computing companies, especially the newer entrants in the market, are classified as penny stocks, trading at very low prices. While this may seem attractive due to the lower entry point, penny stocks are often subject to higher volatility, less liquidity, and fewer regulatory standards. This can expose investors to higher risks, including potential manipulation and a lack of comprehensive financial reporting.
Conclusion
For investors keen on investing in quantum computing stocks, the terrain is undeniably both thrilling and treacherous. This sector is characterized by its potential for explosive growth, yet it is equally fraught with uncertainties. While many players in this field are in their start-up phases, they display immense potential to reshape industries through commercial applications. Simultaneously, the intricate technical challenges inherent to quantum computing can influence and sometimes impede the trajectory of these stocks.
Nevertheless, for those who adeptly chart this course, the rewards can be significant. Given this backdrop, it’s paramount for investors to arm themselves with knowledge, discern the intricate interplay of market forces, and consider a diversified approach—spreading their bets across various quantum computing ventures. This strategy can serve as a hedge against the inherent volatility and risks of the sector.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about quantum computing stocks
What are the top quantum computing stocks to buy?
Some of the top quantum computing stocks to consider include IBM, Microsoft, IonQ, Rigetti Computing, and Quantum Computing Inc.
What quantum computing ETFs to invest in?
The Defiance Quantum ETF is a prominent ETF dedicated to the quantum computing industry. Before investing, ensure you review its holdings and consult with a financial advisor due to the sector’s evolving dynamics.
Where to buy quantum computing stocks?
You can invest in quantum computing stocks with regulated online brokers, such as Interactive Brokers.
Are there any quantum computing penny stocks worth exploring?
Yes, among the quantum computing penny stocks, Rigetti Computing (NASDAQ: RGTI) and Quantum Computing (NASDAQ: QUBT) are notable options to consider.
How can I track the quantum computer stock price?
You can monitor the stock price of major quantum computer companies such as Microsoft (NASDAQ: MSFT), IBM (NYSE: IBM), and IONQ (NYSE: IONQ) through your brokerage account or financial news outlets.
Best Platform for Worldwide Stock Trading & Investing
-
Highly trusted multi-asset broker with clients in over 200 countries
-
Trade on 150 markets globally from a single platform (stocks, ETFs, futures, currencies, crypto & more)
-
Low commissions starting at $0 with no platform fees or account minimums
-
Easily fund your account and trade assets in 26 currencies
-
IBKR pays up to 4.58% interest on cash balances of $10k or more
