Quantum computing stocks are arguably the most volatile growth stocks at this time, with quantum technologies capturing the spotlight in recent months. This interest was galvanised by Google‘s unveiling of its groundbreaking Willow chip on 9 December.
Google’s revolutionary quantum processor has demonstrated the ability to solve complex problems in minutes — problems that would take traditional supercomputers 10 septillion years to complete. It’s something of a breakthrough for quantum technologies, given its exponential error reduction capabilities. If you’re interested and have institutional access, you can read more here.
Quantum theory has existed for over 100 years, but we appear to be approaching a commercial breakthrough. So, could quantum computing stocks make me rich?
Who operates in this space?
There are plenty of options for investors looking to gain exposure to quantum computing. There are pure plays like IonQ (NYSE:IONQ) or big tech companies like Google. We can also gain exposure through private capital raises. With 39 quantum startups in the UK, I’d expect to see one on a crowd funding-type website soon.
Some publicly listed opportunities include:
- Google (Alphabet Inc.) — creator of the Willow chip
- IBM — long-standing player in quantum computing research and development
- IonQ — pure-play quantum computing company
- Rigetti Computing — focused on superconducting qubit technology
- Nvidia — collaborating with quantum companies to accelerate development
- Oxford Instruments – UK-based company providing essential hardware for quantum systems
It’s a broad playing field. Companies like IBM are working on hybrid systems that combine classical and quantum computing for real-world applications, while Google’s latest development represent progress toward fault-tolerant quantum computers. Meanwhile, firms like Oxford Instruments provide critical infrastructure for this burgeoning industry.
However, investors should be wary that quantum computing is still in its infancy regardless of the transformative potential across industries like healthcare, finance, and logistics. The technology remains speculative, requiring significant time and capital before achieving widespread adoption. In fact, several quantum pure play stocks like Rigetti were floundering before the recent interest — the stock is now up 600% over two months.
Spotlight: IonQ
For investors seeking exposure to this cutting-edge field, IonQ is an intriguing opportunity. I added this pure play to my quantum computing watchlist in September — but didn’t buy. It’s up almost 400% since then.
These incredible returns can be attributed to a series of strategic moves and partnerships, including ones with Microsoft Azure and Amazon Web Services, making its quantum solutions accessible to a broader audience.
Moreover, in November, IonQ acquired Qubitekk, a quantum networking company credited with developing the first US commercial quantum network, thus strengthening its capabilities in quantum communications, an important aspect of future quantum computing infrastructure.
However, while this trapped-ion quantum company expects to record between $75m and $95m in quantum computing development contracts by the end of 2024, it’s getting very expensive. In fact, it currently trades with a forward enterprise value-to-sales ratio of 146 times.
Personally, despite the meteoric rise we’ve seen in some quantum stocks over the autumn, I do believe there are pockets of value — maybe even the next multibagger — to be found. I just haven’t worked out which stock that might be.
With the industry expected to grow by up to 40 times by 2040, a well-placed investment could indeed make me rich.
