In this article, we discuss 11 best quantum computing stocks to buy now. If you want to skip our detailed discussion on the quantum computing industry, head directly to 5 Best Quantum Computing Stocks To Buy Now.
The International Data Corporation (IDC) released its second projection for the global quantum computing market on August 17, 2023. It anticipates that customer spending on quantum computing will increase from $1.1 billion in 2022 to $7.6 billion by 2027, demonstrating a 48.1% compound annual growth rate over the forecast period. This updated forecast is considerably lower than IDC's earlier quantum computing prediction from 2021. Many factors have negatively impacted customer spending in the short-term, including slower progress in quantum hardware development, the emergence of alternative technologies like generative AI offering more immediate benefits, as well as higher interest rates and the possibility of a recession. IDC believes that the quantum computing market will continue to experience slow growth until there is a significant breakthrough in quantum hardware development that delivers a quantum advantage. In the meantime, most growth will be driven by improvements in quantum computing infrastructure and platforms and the rise of performance-intensive computing tasks suitable for quantum technology. IDC also expects investments in the quantum computing market to grow at a compound annual growth rate of 11.5% from 2023 to 2027, amounting to approximately $16.4 billion by the end of 2027.
On September 13, 2023, D-Wave Quantum Inc. (NYSE:QBTS)’s CEO, Alan Baratz, joined Bloomberg Television to discuss the potential of quantum computing, the rivalry between the United States and China in this domain, and the significant impact of artificial intelligence (AI) on this field. Ed Ludlow, co-host of Bloomberg Technology, commented that there is a mistaken belief that quantum computing is primarily in the theoretical realm and has not yet made a tangible technological impact. To this, Baratz replied:
“You’re absolutely right. Most people in the industry are saying that quantum computing is years away from commercial reality but at D-Wave we took a very different approach to quantum computing, one that has allowed us to deliver commercial quantum computers today. In fact, we’ve been delivering them for almost two years now. We have over sixty commercial customers that are leveraging our quantum computer to see improved performance and a broad array of business applications.”
Similarly, a UK startup, Phasecraft Ltd., which originated from University College London and the University of Bristol, secured ￡13 million in funding in August 2023. They aim to create algorithms specifically designed for quantum devices like those developed by Google and IBM. While they're developing proof-of-concept products for a UK government institution, Phasecraft’s focus is on advancing software for future quantum processors and accelerating research into components for electric batteries and solar panels.
Quantum computing is quickly taking the world by storm. While Alphabet and IBM are in a competitive race to develop a dependable quantum computer, major financial institutions such as JPMorgan Chase & Co. (NYSE:JPM) and Visa Inc. (NYSE:V) are investigating potential applications for it. In the financial sector, machine learning algorithms are expected to enhance tasks like fraud detection in transactions, portfolio optimization, and options pricing, as stated by Marco Pistoia, who oversees JPMorgan's global technology applied research group. In the field of medicine, Moderna, Inc. (NASDAQ:MRNA) and IBM joined forces in April 2023 to leverage generative artificial intelligence and quantum computing in order to enhance mRNA technology, which is the fundamental technology behind Moderna's highly successful COVID vaccine. Moderna CEO Stephane Bancel commented:
“We are excited to partner with IBM to develop novel AI models to advance mRNA science, prepare ourselves for the era of quantum computing, and ready our business for these game-changing technologies.”
Some of the best quantum computing stocks to invest in include NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG).
Our Methodology
We selected the following quantum computing stocks based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 910 elite hedge funds tracked as of the end of the second quarter of 2023. The list is arranged in ascending order of the number of hedge fund investors in each firm.
Quantum Computing Inc. (NASDAQ:QUBT), a company specializing in nanophotonics-based quantum technology, provides cost-effective commercial solutions. It delivers quantum capabilities while requiring minimal training, consuming low power, and without any specific environmental prerequisites. On September 5, Quantum Computing Inc. (NASDAQ:QUBT) announced a strategic partnership and collaboration agreement with Assured Cyber Protection (Recyber), an AI-driven cybersecurity firm. The primary aim of this agreement is to align their efforts in promoting and providing their respective cybersecurity technologies and products.
According to Insider Monkey’s second quarter database, Israel Englander’s Millennium Management and Matthew Hulsizer’s PEAK6 Capital Management held stakes in Quantum Computing Inc. (NASDAQ:QUBT), collectively amounting to $166,669.
D-Wave Quantum Inc. (NYSE:QBTS) is a Canadian company that offers quantum computing systems, software, and services, including the fifth-generation quantum computer called Advantage, the Ocean suite of open-source Python tools, and the cloud-based Leap service. They also provide a professional service, D-Wave Launch, guiding enterprises through quantum implementation. D-Wave Quantum Inc. (NYSE:QBTS) is one of the best quantum computing stocks to monitor. In the second quarter of fiscal year 2023, D-Wave Quantum Inc. (NYSE:QBTS) recorded bookings of $2.5 million, marking a notable increase of $1.5 million, which corresponds to a 146% rise when compared to the $1.0 million in bookings during the same period in fiscal 2022. This signifies D-Wave's fifth consecutive quarter of year-over-year growth in bookings.
According to Insider Monkey’s Q2 data, D-Wave Quantum Inc. (NYSE:QBTS) was part of 10 hedge fund portfolios, compared to 9 funds in the preceding quarter.
Like NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), D-Wave Quantum Inc. (NYSE:QBTS) is one of the best quantum computing stocks to monitor.
180 Degree Capital made the following comment about D-Wave Quantum Inc. (NYSE:QBTS) in its second quarter 2023 investor letter:
“D-Wave Quantum Inc. (NYSE:QBTS): QBTS reported weak results for the first quarter and a new debt facility from its largest shareholder for up to $50 million, with $15 million drawn initially and the next tranches available if the company achieves certain milestones. After selling off materially following earnings, QBTS appears to be the beneficiary of interest in AI-related stocks, and its stock price increased dramatically from the lows following earnings. With the stock above $1/share, QBTS now has access to its equity facility from Lincoln Park Capital. For the quarter, QBTS increased NAV by $0.11, or $1.2 million.”
Rigetti Computing, Inc. (NASDAQ:RGTI) develops quantum computers and superconducting quantum processors. The company’s Quantum Computing as a Service platform is adaptable for public, private, or hybrid clouds. They provide platforms, research tools, and software used in benchmarking, chemical simulation, education/entertainment, machine learning, and optimization. Rigetti Computing, Inc. (NASDAQ:RGTI) is one of the top quantum computing stocks to buy.
On September 19, Rigetti Computing (NASDAQ:RGTI) announced a five-year contract with the Air Force Research Lab Information Directorate, providing quantum foundry services to their researchers. This contract enables AFRL to utilize Rigetti Computing (NASDAQ:RGTI)’s fabrication and manufacturing capabilities to create tailored quantum systems.
According to Insider Monkey’s second quarter database, 13 hedge funds were bullish on Rigetti Computing (NASDAQ:RGTI), with combined stakes worth $2.3 million. Israel Englander’s Millennium Management is the largest stakeholder of the company, with 1 million shares worth $1.2 million.
IonQ, Inc. (NYSE:IONQ) is a Maryland-based company that specializes in creating versatile quantum computing systems. They offer access to quantum computers with a range of qubit capabilities. The company makes access to its quantum computers through cloud platforms, such as Amazon Web Services’ Amazon Braket, Microsoft's Azure Quantum, and Google's Cloud Marketplace, as well as through its cloud service. IonQ, Inc. (NYSE:IONQ) is one of the leading quantum computing stocks to invest in.
On September 28, IonQ, Inc. (NYSE:IONQ) announced that it has strengthened its partnership with the Air Force Research Lab by providing two trapped-ion quantum computing systems based on barium. According to the agreement, IonQ will install and set up these systems at the Air Force Research Lab's facility in Rome, New York. IonQ, Inc. (NYSE:IONQ) also reported booking $28 million in the second quarter of 2023.
According to Insider Monkey’s second quarter database, 19 hedge funds were bullish on IonQ, Inc. (NYSE:IONQ), same as the prior quarter.
7. Booz Allen Hamilton Holding Corporation (NYSE:BAH)
Number of Hedge Fund Holders: 25
Booz Allen Hamilton Holding Corporation (NYSE:BAH) provides a wide range of consulting, technology, and digital solutions to government, corporate, and nonprofit clients globally. The company specializes in artificial intelligence services, including machine learning, predictive modeling, automation, decision analytics, and quantum computing. It is one of the top quantum computing stocks to monitor. On October 3, Bank of America analysts upgraded Booz Allen Hamilton Holding Corporation (NYSE:BAH) to Buy from Neutral, noting that the company is expected to experience growth as government agencies aim to update and modernize their technology infrastructure.
According to Insider Monkey’s second quarter database, Israel Englander’s Millennium Management is the leading position holder in the company, with 694,859 shares worth $77.5 million.
Baron Asset Fund made the following comment about Booz Allen Hamilton Holding Corporation (NYSE:BAH) in its second quarter 2023 investor letter:
“We re-initiated a position in Booz Allen Hamilton Holding Corporation (NYSE:BAH), the premier provider of outsourced civil and military consulting services to the federal government. We believe that Booz’s consultants (65% of whom possess security clearances) are best in class at tackling sensitive and high priority cybersecurity, intelligence, defense, and spending efficiency projects for various government agencies. Under longtime CEO Horacio Rozanski, the company has thoughtfully invested in AI, cybersecurity, software, and other advanced technologies. It had remained ahead of its peers and is an important partner providing the government mission-critical and highly technical solutions. In addition, Booz is the largest single provider of AI services to the federal government, which we believe will be a source of ongoing, outsized growth.
6. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 51
International Business Machines Corporation (NYSE:IBM) offers integrated solutions and services globally. IBM Quantum offers a range of quantum computing systems with different numbers of qubits and capabilities. Qiskit Runtime, IBM’s quantum computing service and programming model, significantly enhances performance for complex tasks, sometimes achieving a 120-fold acceleration compared to earlier models. On October 5, BoFA kept a Buy rating on International Business Machines Corporation (NYSE:IBM) stock, noting that it possesses a defensive portfolio, a strong dividend yield, and an AI portfolio that is not fully recognized or valued by the market.
According to Insider Monkey’s second quarter database, 51 hedge funds were bullish on International Business Machines Corporation (NYSE:IBM), compared to 49 funds in the prior quarter. Paul Marshall and Ian Wace’s Marshall Wace LLP is a prominent stakeholder of the company, with 1.2 million shares worth $162.5 million.
In addition to NVIDIA Corporation (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), International Business Machines Corporation (NYSE:IBM) is one of the best quantum computing stocks to watch.
Here is what Diamond Hill Capital said about International Business Machines Corporation (NYSE:IBM) in its Q4 2022 investor letter:
“New positions initiated in Q4 included shorts International Business Machines Corporation (NYSE:IBM), Acushnet Holdings (GOLF) and elf Beauty (ELF). Since diversified information technology company IBM’s 2019 acquisition of Red Hat, the company has aggressively pursued a hybrid cloud strategy. Though IBM and its new management team have made solid progress on this pivot, we believe the company still meaningfully lags the cloud hyperscalers and other cloud-native companies. Management has also laid out aggressive long-term targets for revenue growth and free cash flow, both of which we believe the company will struggle to achieve as it faces intense competition in its hybrid cloud business and structural headwinds in the company’s legacy businesses.”
