Quantum computers are incredibly important because they are light years ahead of classical machines and computers and can process billions of simple logical operations per second.
Regular computers use binary switches (1s and 0s) for calculations. In contrast, quantum computers use qubits (qubits) and can handle more complex tasks.
Because of its speed, physicists hope that quantum technology can help solve a long list of problems and dramatically improve everyday processes, including logistics and supply chains, drug discovery, materials research, scheduling, obstruction detection, and traffic management.
The real life and business potential is real: the U.S. government is pouring billions of dollars into researching the phenomenon, trying to get ahead of other countries; McKinsey & Company estimates the industry could be worth nearly $1.3 trillion by 2035.
Here are some of the most popular quantum computing stocks out there right now.
D-Wave System (QBTS)
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D-Wave (NYSE:QBTS) missed analyst expectations in earnings per share (EPS) and revenue last quarter, but other metrics like revenue, orders, and gross margin all performed well, growing 28%, 6%, and 97%, respectively, year over year.
The company also expressed confidence in its prospects, saying that “the market is responding” to its annealing quantum computing business. Simply put, annealing in quantum computing means finding the best solution to a complex problem by exploring multiple possibilities simultaneously.
Potential investors should also be encouraged that D-Wave appears to have completely charmed Wall Street analysts. The company currently has seven ratings, all of which are Buy. These fundamentals make D-Wave a strong contender for a quantum computing stock right now.
D-Wave is a Canadian quantum computing company whose client list includes some of the world's largest companies, including Lockheed Martin (NYSE:LMT), Google (NASDAQ:GOOG, NASDAQ:GOOGL), NASA, and the University of Southern California.
Microsoft (MSFT)
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Microsoft (NASDAQ:MSFT) is synonymous with technology, so it's no surprise that the company is heavily involved in quantum computing. Its Azure Quantum cloud service gives clients access to quantum computing resources, both hardware and software. The company is also partnering with other companies in the space for research and development in the field.
There are many reasons why Microsoft is one of the best quantum computing stocks on the market. First, the company has delivered strong returns to investors so far: shares are up 9% this year and 26% over the past year.
After the company released its fourth-quarter earnings, its shares fell 6% due to poor performance in its AI division, but analysts overall are generally bullish.
For example, financial research firm Morningstar has declared that “our view has not changed” on the company's future prospects. Instead, it believes Microsoft shares are currently undervalued compared to its long-term target of $490 per share.
Nvidia (NVDA)
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Nvidia (NASDAQ:NVDA) has dominated the stock charts over the past year thanks to microchips that support arguably the hottest technology of the moment: AI, but most investors don't know that the company is also working on quantum computing.
Last year, Bloomberg reported that the Santa Clara, California-based company was introducing a cloud service for researchers to test quantum computing software and would eventually offer access to third-party quantum computers.
It's unclear whether Nvidia will pursue this technology more aggressively in the future, but it remains one of the best options for investors looking for a safe investment in quantum computing stocks.
That's because it's one of the best-performing tech companies in recent years: Not only has it grown an astounding 2,657% over five years, but a closer look at its pricing patterns over that period reveals a steady and very promising price trajectory even before demand for its chips exploded.
As of the date of publication, Hope Mutie does not hold (either directly or indirectly) any of the stocks mentioned in this article. The opinions expressed in this article are those of the author and follow InvestorPlace.com's disclosure guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Hope Mutie is a passionate finance and cryptocurrency writer. At InvestorPlace, she stays on top of stock and cryptocurrency market trends, creating insightful, informative content to help investors navigate the markets with confidence.
