Economists’ outlooks of avoiding a recession now seem likely with CPI inflation down to 3.1% for December 2023, marking a slight decrease from the previous month of 3.2%.
In light of the recent CPI index data, 67% of economists now believe the economy will not sink into a recession over the next coming year. While uncertainty remains on interest rates, 17% of economists foresee a rate reduction in the first quarter of 2024. And, another 40% believe in an upcoming rate reduction in the second quarter. This reflects a general consensus of the economy thriving in 2024.
So, now is the time to catch companies before they break out. These three carefully curated quantum computing stocks will generate tremendous value for investor portfolios.
PayPal Holdings, Inc. (PYPL)
First, PayPal Holdings, Inc. (NASDAQ:PYPL) is down around 7.52% to $58.94 in the past year, putting it in an attractive position for investors. The global banking and financial services market will grow at a 7.9% CAGR from 2023 to 2030.
PYPL boasts strong financials. Revenue year over year (YOY) increased 8.36% to $7.42 Billion, and EPS is up 20.37% to $1.30. Additionally, cash and short-term investments increased by 6.43% to $11.55 billion. Further, net change in cash has gone up to $968.00 million, showing confidence and stability in its financials.
Recently, PayPal Holdings has been down on concerns of slowing growth. However, like most technology darlings during the pandemic, PYPL experienced accelerated growth in 2019, 2020, and 2021. The slowdown appears to be a simple return to the mean. Similarly, this happened with Netflix when its user growth appeared to slow but then grew again in the following quarters.
Despite these concerns about user growth, the fundamentals continue to perform well. New management has stressed the importance of delivering value to shareholders through improved margins and stock buybacks. Impressively, the new CEO Alex Chriss hails from Intuit. Also, the business model is well diversified with a Stripe and Square competitor in the portfolio.
Accordingly, Yahoo Finance analysts see the value PYPL holds for future growth, with every analyst labeling it as a buy. Given the stock currently sits at $58.94, many feel it is undervalued. This new contract primes PYPL for an explosion in price.
Intel Incorporated (INTC)
Intel Incorporated (NYSE:INTC) is a semiconductor and software company, best known for its world leading Central Processing Units (CPU) that it designs and manufactures. Yahoo! Finance has 36 analysts predicting a 1-year price range on QCOM to be between $17.00 and $56.00, with a mean of $44.04.
INTC has robust financials. In fact, $14.6 billion revenue for Q3 2023 beat analyst expectations by $540.4 million. INTC shows great signs of profitability with a 15.6% EBIDTA margin, well above the sector median. The stock even shows signs of being undervalued with a price/book ratio of 1.84, significantly lower than the sector median.
Intel Incorporated demonstrates its potential for growth through new government regulations and the factory expansion. The company will greatly benefit from approval of the CHIPS and Science Act. This law will fund over $280 billion for domestic research and manufacturing of semiconductors, subsidizing INTC’s future growth. Also, it’s currently in the process of developing a $20-billion mega-factory in central Ohio. This $20 billion structure will add massive value to the company’s total revenue once completed.
IonQ Incorporated (IONQ)
IonQ Incorporated (NYSE:IONQ) leads in quantum computing hardware and software, utilizing trapped ion technology. Analysts on Yahoo! Finance predict its one-year stock price between $14.00 and $21.00, averaging $17.80, with the current price at $12.76.
The quantum computing industry is set to reach $4.37 billion by 2028, growing at a 38.1% CAGR. Factors include increased use in finance and drug development simulations, potentially saving years.
IONQ is poised for substantial growth for several compelling reasons. First, the company has already demonstrated the practical viability of its quantum computing technology. The successful operation of its 29AQ machine results in both commercial success and significant contributions to scientific research.
Second, the company’s expanding clientele includes major players such as Hyundai, Airbus, GE Research, Goldman Sachs, and the U.S. Air Force Research Lab. These attest to the increasing commercial adoption and trust in IONQ’s capabilities.
Finally, the imminent release of the AQ64 promises unparalleled computing power at an affordable price. Further, it positions IONQ to capture a substantial share of the rapidly growing quantum computing market. This is especially relevant as it addresses key challenges such as temperature issues through its trapped ion technology operating at room temperature.
On the date of publication, Michael Que did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
