Quantum computing has huge potential, which creates huge opportunities for quantum computing stocks.
For example, a recent McKinsey report stated that quantum computing could unlock approximately $2 trillion in value by 2035 across chemistry, life sciences, finance and mobility.
Take the chemical industry for example.
For chemicals, quantum computing could “open up the possibility of modeling quantum mechanical systems such as molecules, polymers and solids with an entirely different level of accuracy,” according to McKinsey.com.
In the life sciences, quantum computing could help more quickly develop new drugs to treat diseases previously thought untreatable. “Quantum computing is expected to enable us to predict and simulate the structure, properties and behavior (or reactivity) of these molecules more effectively than classical computing,” McKinsey added.
It could also help greatly improve the efficiency of artificial intelligence, especially as data storage and cloud computing needs grow dramatically.
That’s just a small part of what it can help with.
So, we are looking at what could be a major game changer. The only problem here is that, like any industry that is still in its early stages, you have to be patient with stocks like these:
Ion Q
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The last time I mentioned IonQ (NYSE:IONQ) I said it was a buy on the downside.
“IONQ has just found strong support after dropping from around $22 to recent lows around $7.30 and is just beginning to reverse from overextended RSI, MACD and Williams %R,” I added.
That was on July 5. Today, IONQ tested a high of $9 before dropping back down to $7.62 thanks to some key catalysts and remains a strong buy.
Public and private organizations such as Airbus (OTCMKTS:EADSY), Hyundai Motors (OTCMKTS:HYMTF), and the U.S. Air Force Research Laboratory are also using the company’s quantum computers to explore new projects. Even Oak Ridge National Laboratory has begun researching energy schedule optimization for the U.S. national power grid. It’s also working with the U.S. Navy to solve corrosion problems.
Additionally, CEO Peter Chapman said: “One of the new things we’re working on this year is applying quantum to large-scale language models. We’re only at the beginning of that journey, but we hope to have results within a year or so.”
D-Wave Quantum (QBTS)
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Another top quantum computing stock to buy is D-Wave Quantum (NYSE:QBTS) .
The company’s charts are also unremarkable, but the technology is still in its early stages, so it will take time. And while revenue isn’t as strong, bookings are growing at a healthy clip. For example, bookings in the first quarter were $4.5 million, up 54% year over year.
In terms of earnings, the loss per share of 11 cents was in line with expectations. However, sales of $2.47 million were up 56.3% year over year, but missed expectations by just over $500,000. Furthermore, analysts at B. Riley have just initiated a buy recommendation on the stock.
And, as I noted earlier this year, “the company has signed an agreement with Deloitte to accelerate the adoption of quantum computing in governments and businesses across Canada, and is also working with Deloitte in the U.S. on transportation and national security issues.”
Defiance Quantum ETF (QTUM)
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Alternatively, if you want a lower-cost way to diversify into top quantum computing stocks, there’s the Defiance Quantum ETF (NYSEARCA:QTUM).
It has an expense ratio of 0.40%, and as DefianceETFs.com points out, the ETF invests in companies “at the forefront of machine learning, quantum computing, cloud computing and other transformative computing technologies.”
Major holdings include Nvidia (NASDAQ:NVDA), Marvell Technology (NASDAQ:MRVL), and Advanced Micro Devices (NASDAQ:AMD).
The ETF has fallen to around $61.50 due to the recent market sell-off after rising from around $55 to nearly $67. However, if we are patient, we expect it to rise to its previous highs first. In the long term, we expect it to approach $75.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the author in accordance with InvestorPlace.com’s Publishing Guidelines.
On the date of publication, the editor in charge did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace.com contributor Ian Cooper has been analyzing stocks and options for Web-based advice since 1999.
