The Next Big Thing: 3 Stocks Leading in Quantum Computing

Stocks to buy

Quantum computing stocks could be the newest trend in the technology space. The reason I’m bullish on these companies is that the shift from classical to quantum computing could be dramatic. It will unlock the needed processing power for us to make large strides in the fields of AI, healthcare, robotics, and just about every field you can think of.

Quantum machines are expected to be exponentially more powerful than classical computers, which will allow us to harness more complex algorithms and potentially refine entire industries. Although we’re currently a long from realizing their potential (since they are currently in research and development) once they are launched to the market they could be an undeniably disruptive force.

So if you are looking for some quantum computing stocks to add to your portfolio, then read on. Here are the best of the best that you should consider adding to your portfolio today.

International Business Machines (IBM)

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International Business Machines (NYSE:IBM) has been a pioneer in quantum computing, investing significantly in research and development. 

IBM is one of my favorite picks for one of those quantum computing stocks to buy. The reason is that IBM shares offer investors an attractive blend of a blue-chip tech stock, a dividend yield of 3.46% as a Dividend Aristocrat, along with some promising recent developments for its quantum machines.

For instance, IBM unveiled its most advanced quantum processor last year, offering a five-fold improvement in error reduction compared to its predecessor, the IBM Quantum Eagle. IBM’s management has also taken a long-term view to help realize the power of quantum machines. The company has extended its Quantum Development Roadmap to 2033, focusing on improving and scaling its quantum capabilities.

With all those factors considered, IBM is then one of the quantum computing stocks to buy.

Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is also one of my favorite contenders in the quantum arms race. This company, which was part of the Magnificent Seven, has received much investor attention, and I think its recent progress into bringing a commercial quantum system online will do wonders for investors’ enthusiasm.

MSFT is exploring a unique approach to quantum computing, namely through the use of topological qubits. It can be described as a high-risk, high-reward strategy that could pay off handsomely for the company if its development efforts pan out.

The reason it’s a relatively higher risk than other approaches to quantum computing is that harnessing topological qubits goes deep into largely experimental and unexplored regions of physics and engineering, so there’s more room for error. On the other hand, successfully harnessing this approach could lead to a quantum system that’s relatively more stable and less prone to errors than others, which would be a significant competitive advantage for the company.

Rigetti Computing (RGTI)

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Rigetti Computing (NASDAQ:RGTI) is a pioneer in hybrid quantum-classical computing. The approach of RGTI differs dramatically from MSFT as it specializes in integrating its quantum processors into existing high-performance computing infrastructures, which could give it a faster time to market than its competitors.

The use of classical computers along with quantum systems may also provide RGTI systems with more cross-functional flexibility, as well as potentially expand its ecosystem towards developers who are more familiar with legacy systems.

Like most other pure-play quantum computing stocks, RGTI is also currently unprofitable. But its shares seem fairly valued, as they trade for just around 10x earnings, while Wall Street also believes the company is a Strong Buy.

On the date of publication, Matthew Farley did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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