Stocks to buy

Quantum computing is among the most high-potential technologies you can invest in this year. These computers offer massive performance improvements over classic computers, especially as transistors become smaller and smaller, approaching the size of an atom. The transistors that CPUs currently use will present a significant problem in the future, as they will reach a point where they can no longer get smaller. This means that it will be much harder to increase the performance of computers over time.

However, quantum computers do not use transistors. Thus, they are much easier to scale in terms of performance and are far more energy efficient. That is why many see quantum computing as among the top investments for the future. These powerful computers could be commercially available as early as 2025.

Of course, it could also take decades for these computers to become cheap enough for the average American to afford them. But there is no doubt that the companies manufacturing and marketing these quantum computers will make massive profits.

I believe the following three quantum computing stocks will be among the biggest beneficiaries once this technology goes mainstream:

Quantum Computing Stocks: IBM (IBM)

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Although Big Blue may offer little near-term upside as it has struggled to maintain its earnings and has been outperformed by the market for the past decade, it provides exceptional stability and a healthy dividend yield.

However, IBM (NYSE:IBM) will likely grow much faster in the future as it is making a turnaround by shifting its focus to cloud computing, AI, and blockchain, which will position it as a dynamic tech company. The company’s Q4 2022 earnings showed that its hybrid cloud segment is driving growth with an 11% revenue increase, compared to 3% for software and 0.5% for consulting.

IBM is also making significant advancements toward making quantum computing viable and commercially available. In fact, IBM introduced the first circuit-based commercial quantum computer in 2019, though it is significantly less powerful than the 4000-qubit processor it expects to have by 2025.

The company could pass the 1000-qubit milestone this year, 37 times more than its 27-qubit Falcon processor in 2019. That sort of progress should prove to investors that IBM is serious about quantum computing and that it’s time to get on board.

IonQ (IONQ)

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As my colleague Muslim Farooque pointed out in one of his recent columns, IonQ (NYSE:IONQ) is still a speculative play among quantum computing stocks, but what makes the company worth the potential risk is its partnership with other tech giants. Namely Amazon Web Services (or AWS) and Google Cloud.

The company is developing one of the most robust quantum computing architectures using ion traps. This type of computer has the potential to perform certain computations much faster than traditional computers, making it a crucial tool for solving complex problems in fields such as cryptography, chemistry, and machine learning. In the future, these quantum computers could be integrated with the burgeoning cloud segments of many big-name tech companies.

IonQ is still in its early stage, and I see its current valuation as a bargain given the potential of its partnerships. The company also plans to open a manufacturing facility in Seattle and invest $1 billion in the Pacific Northwest over the next 10 years. Thus, it is among the top quantum computing stocks to buy.

Quantum Computing Stocks: Microsoft (MSFT)

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Microsoft (NASDAQ:MSFT) is a company that white-collar workers can’t avoid. Even excluding Windows, its 365 product family of productivity software is used by almost everyone. And recently, the company’s partnership with ChatGPT has even Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) worried about its future.

The company is firing on all cylinders, and that doesn’t exclude quantum computing. Microsoft’s Azure Quantum is partnering up with many quantum computing companies to scale its existing cloud business. If successful, quantum computing would allow Microsoft’s Azure to gain an advantage in this field, which Amazon’s (NASDAQ:AMZN) AWS mostly dominates today.

Naturally, Microsoft’s high valuation won’t allow for multi-bagger gains in the near term. But its aggressive expansion and ability to contest well-established brands’ market share makes me believe Microsoft’s growth story is far from over.

On the date of publication, Omor Ibne Ehsan 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.

Omor Ibne Ehsan is a writer at InvestorPlace. He is also an active contributor to a variety of finance and crypto-related websites. He has a strong background in economics and finance and is a self taught investor. You can follow him on LinkedIn.

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