[Editor’s note: “7 Quantum Computing Stocks to Buy for the Next 10 Years” was previously published in July 2022. It has since been updated to include the most relevant information available.]
Quantum computing has long been a concept that is still in the theoretical phase. Harnessing quantum mechanics to create a next-generation class of quantum computers with nearly unlimited computing power remained elusive.
But quantum computing is starting to make its move. Recent breakthroughs in this emerging field – such as IBM‘s (IBM) advanced 100-qubit quantum chip – powering quantum computing. In the next few years, this space will go from theory to reality. And this transition will trigger huge growth in the global quantum computing market.
The impact on the investment?
It’s time to buy quantum computing stocks.
Transformational power of quantum computing
At scale, quantum computing will revolutionize every industry on the planet, from finance to biotechnology to cybersecurity and everything in between.
It will improve the way drugs are developed by simulating molecular processes. It will reduce energy loss in batteries through optimized routing and design, thereby enabling hyper-efficient batteries for electric cars. In finance, it will accelerate and expand portfolio optimization, risk modeling and derivatives creation. In cybersecurity, it will disrupt the way we handle encryption. It will create superior weather forecasting models, unlock advances in autonomous vehicle technology, and help humans fight climate change.
I’m not kidding when I say quantum computing is going to change everything.
And as this next-gen computing transforms the world, quantum computing stocks will be big winners over the next decade.
With that in mind, here are seven of those stocks to buy for the next 10 years:
Quantum Computing Stocks to Buy: Alphabet
Among the various quantum computing stocks to buy for the next 10 years is probably the best alphabet (WELL, Google) Warehouse.
Its Google AI Quantum is based on a state-of-the-art 54-qubit processor called Sycamore. And many consider this to be the leading quantum computing project in the world. Why? This thinking is largely supported by the fact that in late 2019, Sycamore performed a calculation in 200 seconds that would have taken the world’s most powerful supercomputers 10,000 years to complete.
This feat led Alphabet to claim that Sycamore had achieved quantum supremacy. What does that mean? Well, that’s the point where a quantum computer can, in a relatively short amount of time, perform a task that no other supercomputer could do in a reasonable amount of time.
Many have since debated whether or not Alphabet actually achieved quantum supremacy.
But that’s kind of a moot point.
The reality is that Alphabet built the world’s leading quantum computer. The technology surrounding it only gets better. And the computing power of Sycamore too. And through its Google Cloud business, Alphabet can turn Sycamore into a market-leading quantum computing-as-a-service company with tremendous revenue at scale.
To that end, GOOG stock is one of the best quantum computing stocks to buy today for the next 10 years.
International Business Machines
The other “big dog” that closely rivals Alphabet in the quantum computing space is IBM.
IBM has been big in quantum computing for years. But Big Blue attacked this space in a fundamentally different way than its peers.
That said, other quantum computing players like Alphabet have been chasing quantum supremacy. But IBM has eschewed that idea in favor of building on what the company calls “quantum advantage.”
Quantum advantage is said to be not really different from quantum superiority. The former addresses a continuum focused on getting quantum computers to perform certain tasks faster than traditional computers. The latter addresses a moment when it comes to making quantum computers permanently faster than conventional computers in all things.
But it’s a philosophical difference with huge implications. By focusing on building the quantum advantage, IBM is specializing its efforts in making quantum computing measurably useful and economical in specific industries for specific tasks.
In this way, IBM creates a fairly straightforward go-to-market strategy for its quantum computing services over the long term.
IBM’s actionable, simple, and tangible approach makes it one of the safest quantum computing stocks to buy today for the next 10 years.
Quantum Computing Stocks: Microsoft
Another big tech player in the quantum computing space with promising long-term potential is Microsoft (MSFT).
Microsoft already has a huge infrastructure cloud business, Azure. Building on that foundation, the company launched Azure Quantum. It’s a quantum computing business with the potential to morph into a massive QCaaS business.
Azure Quantum is a secure, stable, and open ecosystem that serves as a one-stop shop for quantum computing software and hardware.
The main thesis here is that Microsoft will leverage its already huge Azure customer base to sell Azure Quantum. This gives Azure Quantum a large and long runway for widespread early adoption. And that’s the first step to turn Azure Quantum into a massive QCaaS business.
And it helps that Microsoft’s core Azure business is absolutely on fire right now.
All in all, quantum computing is simply one facet of the much broader Microsoft enterprise cloud growth narrative. This narrative will remain robust for years to come. And it will continue to support further gains in MSFT stock.
The most interesting, smallest, and potentially explosive quantum computing stock on this list is quantum computing (QUBT).
And the bull thesis is pretty simple.
Quantum computing will change everything in the next few years. But the hardware is expensive. It probably won’t be ready to offer average customers measurable benefits at a reasonable cost for several years. Therefore, Quantum Computing is building a portfolio of affordable quantum computing software and applications that deliver quantum computing power. And they can run on traditional legacy supercomputers.
This is how Quantum Computing hopes to close the affordability gaps. It aims to become the widespread, low-cost provider of accessible quantum computing software for companies that cannot afford full hardware.
Quantum Computing has begun commercializing this software, namely QAmplify, its suite of powerful QPU extension software technologies, through three products currently in beta mode. According to William McGann, the company’s Chief Operating and Technology Officer:
“Using our QAmplify algorithm in the BMW Group Quantum Computing Challenge 2021 for vehicle sensor optimization provided a proof of performance by extending the effective capability of the annealer by 20x to 2,888 qubits.”
Quantum Computing’s products will likely begin to win long-term contracts from automakers, finance, healthcare and government customers. Those early signups could be the start of thousands to Quantum’s services over the next five to 10 years.
You could really see this company going from zero to hundreds of millions of dollars in revenue any time soon.
If so, QUBT stock — which has a market cap of $81 million today — could skyrocket.
Quantum Computing Stocks: Alibaba
Like others in this room Alibaba‘s (BABA) focused on creating a robust QCaaS arm to complement its already massive Infrastructure-as-a-Service business.
In short, Alibaba is the leading public cloud provider in China. In fact, Alibaba Cloud owns about 10% of the global IaaS market. Alibaba intends to use this leadership position to sell quantum computing services to its vast existing customer base. And finally, it hopes to become the biggest QCaaS player in China as well.
Will it work?
The Great Tech Wall of China will prevent many on this list from participating in or achieving scale in China. Alibaba has some nationwide quantum computing competition. But this is not a winner take all market. And given Alibaba’s huge resource advantages, it’s very likely to become a top player in China’s quantum computing market.
That’s just another reason to buy and hold BABA stock for the long term.
The other major Chinese tech company to dive headfirst into quantum computing is baidu (BIDU).
The company opened its own quantum computing research center in 2018. According to its website, the goal of this research center is to integrate quantum computing into Baidu’s core businesses.
If so, that means Baidu’s goal for quantum computing deviates from the norm. Others in this field want to scale up quantum computing power to sell as a service to third parties. Baidu wants to expand quantum computing power to improve its own operations, at least initially.
This will pay off greatly for the company.
Baidu’s search and advertising business could improve significantly with quantum computing. Advances in computing power could dramatically improve its search algorithms and ad targeting techniques, increasing its profits.
And thanks to its early research into quantum computing, BIDU stock has healthy upside potential.
Quantum Computing Stocks: Intel
Last — but not least — on this list of quantum computing stocks to buy is intel (INTC).
Intel may be falling behind the competition – viz modern micro devices (AMD) – on the traditional CPU front. But the semiconductor giant is leading the way in developing potential quantum CPU candidates.
Intel’s newly announced Horse Ridge cryogenic controller chip is widely regarded as the best quantum CPU candidate on the market today. The chip contains four radio frequency channels that can control 128 qubits. That’s more than double Tangle Lake, Intel’s predecessor quantum CPU.
The big idea, of course, is that if quantum computers are built at scale, they will likely be based on Intel’s quantum CPUs.
As such, the potentially explosive growth in the quantum computing hardware market over the next five to 10 years represents a tremendous, albeit speculative, growth catalyst for Intel and INTC stocks.
At the time of publication, Luke Lango had no position (either directly or indirectly) in any of the securities mentioned in this article.