Considering Venturing into Quantum Computing Investments? Two Outstanding Stocks to Consider as of Now
Quantum computing, the next big leap for the tech industry, is all about processing data using quantum bits or qubits, different from traditional computers that stick to binary zeros and ones. Quantum computers can handle multiple data points simultaneously, giving them an edge in processing power. However, they're large, expensive, power-hungry, and error-prone, making them mainly used for specialized research applications.
But with advancements in technology, these quantum processing units (QPUs) are becoming smaller, more powerful, and energy-efficient. Experts predict the quantum computing market could grow at a compound annual growth rate (CAGR) of 20.5% from 2025 to 2030, according to Grand View Research. Yet, Nvidia CEO Jensen Huang recently forecasted it might take 15 to 30 years before "useful quantum computers" emerge in the mainstream market.
If you're looking to invest in this nascent field, consider these two options: IonQ and Microsoft.
The high-risk, high-reward pick: IonQ
IonQ sells quantum computers and its cloud-based quantum computing service. Customers include government agencies, universities, and the U.S. Air Force Research Lab. IonQ's proprietary "trapped ion" technology aims to shrink the QPU width, making quantum computers cheaper, smaller, and more precise.
IonQ expects its total quantum computing power to grow significantly over the years. By 2028, it aims to have 1,024 AQ, or algorithmic qubits, with an error detection rate of 99.95%. Despite impressive revenue growth predictions and a large enterprise value, IonQ remains risky. But its status as a "pure-play" quantum computing company could make it appealing to investors.
The safe bet: Microsoft
If you're uncomfortable with high risk, opt for Microsoft. It's a tech giant known for its leadership in cloud and AI, but it's also making strides in quantum computing. Microsoft unveiled its Majorana 1 chip that can fit eight topological qubits on a small circuit, potentially delivering over a million qubits of processing power someday. While it won't mass-produce Majorana 1 chips anytime soon, integrating these into Microsoft's cloud infrastructure and AI ecosystems could boost its services significantly in the future.
Microsoft is a balanced play on the growing cloud, AI, gaming, and enterprise software markets. Its revenue and EPS are projected to grow at a 14% CAGR from 2024 to 2027. Microsoft is a solid investment, offering exposure to quantum computing without taking on heavy risks.
[1] QDaria: https://qdaria.com/[2] Q1 Market: https://www.q1markets.com/[3] Yahoo Finance: https://finance.yahoo.com/[4] Omdia: https://www.omdia.com/[5] Grand View Research: https://www.grandviewresearch.com/
In the forecasted quantum computing market growth, companies like IonQ and Microsoft could be potential investing opportunities. IonQ, with its 'trapped ion' technology, aims to make quantum computers cheaper, smaller, and more precise, targeting 1,024 AQ by 2028. However, due to its high-risk nature, it remains appealing solely to investors focusing on this niche field.
On the other hand, Microsoft, a tech giant, is a safer bet for conservative investors. Known for its leadership in cloud, AI, and Majorana 1 chip development, it may provide over a million qubits of processing power in the future. Microsoft's balanced investment in various markets provides significant growth potential, projected at 14% CAGR from 2024 to 2027.
In the context of financial investments, considering the predicted growth in the quantum computing industry alongside the conservative versus aggressive risk tolerance of different investors is crucial.
By 2030, the quantum computing market could witness significant expansion, with companies like IonQ and Microsoft positioning themselves as key players.