3 Quantum Computing Stocks to Buy on the Dip: February 2024

Quantum computing is a scientific field that uses quantum mechanics to solve complex problems faster than traditional computers. It’s a lesser-known are of technology that is growing by leaps and bounds.

In fact, consulting firm McKinsey & Co. forecasts that the market for quantum computing could reach $1.3 trillion by 2035. Industries within automotive, chemicals, financial services, and life sciences would be the main beneficiaries of the technological advances. Given the huge, largely untapped market, it should come as no surprise that companies are racing to capitalize on the opportunity. Both small start-ups and the most powerful tech firms worldwide are competing to develop the most advanced quantum computers of today and tomorrow.

Let’s explore the top three quantum computing stocks to buy while they are on the dip this month.

IonQ (IONQ)

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IonQ (NYSE:IONQ) is a pure-play quantum computer concern. The company is developing a trapped ion quantum computer and also makes quantum circuits for use by third parties.

IonQ is widely viewed as one of the best ways for investors to gain exposure to the quantum computing sector. Evidence lies in the 93% gain in the company’s share price over the last 12 months. However, IONQ stock has pulled back 14% year to date (YTD). Therefore, a prime buying opportunity for investors is present.

The decrease in IONQ stock can be blamed on the fact that the company remains unprofitable. It reported a net loss of $44.8 million in last year’s Q3. However, sales grew 122% year over year (YOY) to $6.1 million, and its customer bookings now exceed $100 million. Also, rumors circulate that IonQ could become a takeover target as larger tech companies look for ways to capitalize on the emergence of quantum computing.

IBM (IBM)

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IBM (NYSE:IBM) has its hands in a lot of pots. One of the biggest pots is quantum computing. Last December, IBM unveiled what is being called the world’s most advanced quantum computer at its Thomas J. Watson Research Center.

Called the “The IBM Quantum System Two,” the computer is capable of solving the most complex mathematical problems. Further, this would be achieved in a fraction of the time that it would take the world’s fastest supercomputers.

Also, IBM unveiled a new quantum computing chip in December. Taken together, the Quantum System Two and chip, combined with new code, could lead to IBM producing a series of quantum machines by 2033. Recently, IBM’s Director of Research Dario Gil appear on the TV show 60 Minutes. He believes the IBM’s quantum computers could solve problems in physics, chemistry, engineering, and medicine within minutes. That would take today’s silicon-based supercomputers millions of years to compute.

IBM stock has gained 35% in the last 12 months, including a 14% year-to-date increase.

Alphabet (GOOG/GOOGL)

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In addition to being an artificial intelligence (AI) leader, Alphabet (NASDAQ:GOOG/NASDAQ:GOOGL) leads the pack in quantum computing.

The company’s scientists and engineers have been responsible for several major breakthroughs in quantum computing over the years. In 2019, the company announced that it had achieved what’s known as “quantum supremacy.” That’s when a quantum computer solves a problem that a traditional computer couldn’t.

In Alphabet’s case, one of its quantum computers solved a calculation in three minutes and 20 seconds. In contrast, today’s most powerful supercomputers would need thousands of years to achieve it. Additionally, Alphabet has successfully demonstrated for the first time that errors in quantum computing could be reduced by increasing the number of qubits used in processing. This overcomes what was previously viewed as a major stumbling block for quantum computers. GOOGL stock has risen 34% in the last 12 months.

On the date of publication, Joel Baglole held a long position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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