If you’re on the hunt for quantum computing stocks to buy, you’re in the right place. For the past several years, artificial intelligence (AI) has taken the front stage. Not just in the tech field, but also in the stock market. AI advancement has been tremendous, allowing businesses, both large and small, to automate some of their processes. Some of the largest companies have ramped up their investing in AI teams and divisions, amounting to billions of dollars in additional capital just to keep up with others in the field.
However, there is a newcomer to the field that is independent of AI but will complement it in the future, which is quantum computing. But what is it exactly? Quantum computing uses specialized algorithms and hardware while using quantum mechanics to solve complex problems that typical computers will take either too long to solve or cannot solve entirely. Although the world of quantum computing and AI is incredibly complex, we have simplified investing in the field by narrowing it down to 3 companies that are at the forefront of the industry, while still being diversified.
Quantum Computing Stocks to Buy: Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) is an American-based and international leader in the designing and manufacturing of graphics processing units. Although the company’s main focus currently is on the AI market, it also has a division that focuses on the quantum computing industry. The stock currently trades at about $924, with a price target of $1,100. This new price target is almost $200 more than the current trading price of a stock, signifying a significant upside potential for Nvidia.
The company accelerates quantum computing centers around the world with its proprietary CUDA-Q platform. The platform also ties quantum computing into AI, allowing the system to solve new and countless problems much faster than before.
The stock currently trades at 36.53x forward earnings. This is about 20% lower in comparison to the stock’s own five-year average forward price to earnings (P/E) ratio of 46.14x. Thus, considering what the stock usually trades for, it might be relatively undervalued and at a great point to scoop up some shares.
Alphabet (GOOG, GOOGL)
The company that goes hand in hand with the internet is Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL). The American company first started as a search engine in the late 90s with its main goal of creating the perfect search engine. Fast forward 25 years and you now have a multi-trillion-dollar international company with departments in tech, consumer electronics, data, AI, e-commerce and quantum computing. The company’s stock currently trades at about $177 but is on track to rise to an average of $195, with a high of $225 in the next 12 months.
In recent years, it has set out to build the best quantum computing for otherwise impossible problems with the introduction of XPRIZE Quantum Applications and Quantum AI. The program is designed to advance the field of algorithms relating to quantum computing with real-world applications.
As such, the company is in a quickly growing phase, and EPS is forecast to soar from $5.80 last year to over $7.84 by 2025. This makes it a great pick for any investor.
Intel (INTC)
Intel (NYSE:INTC) has specialized in semiconductors since its founding in Mountain View, California in 1968. The company is the world’s largest manufacturer of semiconductors and CPUs and has been since its founding. Intel’s stock is at about $32 and the average price target is $39.63, with a low of $17 and a high of $68. This would mean an upside potential of almost 24%, on average.
The company has invested heavily in quantum computing in the past several years and is currently putting its expertise to good use, creating “hot silicon spin qubits”. Qubits are essentially small computing devices that perform differently than typical transistors while also operating at high temperatures.
The company is working diligently on applying the qubits into quantum computing chips that can be used to advance countless fields, while also working with AI systems. All this work is not for nothing. The company is translating this into earnings growth with EPS expected to rise from $1.01 at the end of this year to $1.80 by the end of 2025. As such, this stock should be on any investor’s watch list.
On the date of publication, Ian Hartana and Vayun Chugh did not hold (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.
