Quantum computing is generally accepted as the next big technology investment after the Artificial Intelligence (AI) race is over. It is estimated that AI spending will continue until at least 2030, which is the year quantum computing technology is expected to achieve commercial success. However, if you wait until 2030 to start investing in quantum computing, most of the benefits will be gone.
Although investing in early quantum computing companies is risky, I think investors should dedicate a small portion of their portfolios (say, 1% to 3%) to this emerging technology, as the benefits that can come from this industry are enormous.
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How big is the potential of quantum computing?
Quantum computing is not expected to exist in one place. The generally accepted future for this technology is to operate in a hybrid computing environment where current high-speed computing devices (such as those currently being developed for AI) are used in conjunction with quantum computing.
By combining these two technologies, users expect to unlock capabilities they never had before. This includes AI training, logistics and supply chain optimization, statistical analysis, and weather modeling. Quantum computing is likely to supercharge our current capabilities and improve our current computing performance.
Consulting firm McKinsey & Company estimates that the total quantum computing market opportunity in 2035 will be $72 billion per year. That’s a huge market that’s expected to emerge over the next decade, making investing in it a no-brainer for anyone with a long-term investment outlook.
Several companies are competing in the quantum computing race, so which ones are the most expensive?
The investment opportunities in quantum computing are endless
Because the potential for quantum computing is predicted to be so large, it should come as no surprise to investors that legacy technology companies are competing with smaller companies to be the first to deliver quantum computing. While these large companies are safe investment options, their benefits are limited. Chances are if you’re already investing in AI, you probably own shares of such companies. Nvidia (NVDA Image 0.91%), Alphabet (GOOG 0.22%) (GOOGL 0.22%)and Microsoft (MSFT + 0.45%)all of which invest in quantum computing capabilities.
Two of my favorite quantum computing stocks that I think will go up in the next few years are IonQ (IONQ 3.93%) and D-Wave Quantum (QBTS 5.61%). Both companies are taking different approaches to the quantum computing space, and both could be successful.
Modern Change
(-3.93%) $-1.08
Current Price
$26.43
Important Information Points
Market Cap
$10B
Location of the Sun
$26.38 – $28.16
52wk Range
$18.81 – $84.64
Volume
534K
Avg Vol
21M
Gross Margin
-2267.11%
The IonQ method uses a new technique known as ion trapping and provides very accurate results. This has allowed IonQ to emerge as a front runner in the quantum computing race and has given several investors an incredible boost to the stock. With its revenue up 429% year over year in its most recent quarter and IonQ holding the world record for the most accurate quantum computer, it’s safe to say things are looking up for IonQ. Just because it’s leading right now doesn’t mean it won’t stumble, but it’s the best option investors have right now.
D-Wave Quantum isn’t focused on building a general-purpose quantum computer like the IonQ. Instead, it chooses a more specific method, which uses quantum annealing. Quantum annealing looks for the lowest energy level in the system, which it identifies as the optimal solution. Optimization problems are many of the tasks that quantum computing is expected to improve, so D-Wave’s focus on this industry could provide a competitive advantage in other areas.
Modern Change
(-5.61%) $-0.78
Current Price
$13.12
Important Information Points
Market Cap
$5.1B
Location of the Sun
$13.08 – $13.89
52wk Range
$5.77 – $46.75
Volume
487K
Avg Vol
30M
Gross Margin
82.59%
Although there is no guarantee of success with these two, they are my top picks in the area right now. By keeping a low exposure to these stocks, you can balance the risk reward level by making the most of the positions. Time will tell how these two pan out, but I think they are worth the investment.
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