The quantum computing stocks have really heated up since Jensen Huang changed his tune (for the better) on his expectations for the nascent technology’s timeline. Undoubtedly, there’s still much work to be done before the broad basket of quantum stocks (and perhaps a handful of quantum IPOs) can have what it takes to make a quantum leap similar to the one Nvidia (NASDAQ:NVDA) made in the past decade.
After Nvidia’s so-called “Quantum Day,” perhaps it’s not so clear when the “insanely complicated” tech is ready for prime time. Some think quantum could have its massive moment in 15 months, while others may think 15 years is a more realistic timeline. It’s really hard to tell the future when it comes to game-changing new tech. After all, how many investors knew ChatGPT and the AI boom would soon change the world in the midst of COVID lockdowns just four years ago?
Quantum stocks are getting hot again.
Though I’d temper expectations when it comes to quantum, I do think that there’s a high chance we could hear more about the quantum stocks in coming years, as breakthroughs, partnerships, and all the sort add fuel to what could be a multi-year rally.
Indeed, quantum is exciting and all, but investors must buy what they know and not just pick a quantum stock because of some arbitrary factor, whether that’s momentum, a fancy ticker symbol, or simply because one’s friend has purchased a few shares.
In short, the quantum computing trend isn’t going anywhere. But investors should remember that extreme volatility is to be expected. Additionally, paying special attention to the individual companies and what sets them apart from the pack, I believe, is an important first step before clicking any buy button.
In this piece, we’ll look at two popular quantum stocks worth keeping on the radar, as Wall Street digests every bit of quantum news to get a better gauge of that quantum timeline.
IonQ
IonQ (NASDAQ:IONQ) is a natural first pick for many seeking a quantum pure-play. The $13 billion company is back above $44 per share and could be in for a much-awaited breakout to new highs if positive industry and company-specific headlines keep flowing in. Not many people thought IONQ stock would come soaring back in record time after a few words from Jensen Huang sunk the quantum trade earlier this year.
Though IonQ has emerged as one of the early quantum leaders, it’s difficult to tell when the profits will start flowing in, as the firm advances its commercialization strategy. At this juncture, I find the firm’s early partnerships around the world encouraging.
With a world of opportunity for further collaborations and a top boss in CEO Niccolo de Masi, who sounds serious about getting the world “quantum-ready,” I certainly wouldn’t bet against the stock, even if you view them as absurdly overvalued and overdue for a near-term pullback.
Perhaps the best way to get in may be on such a dip. In any case, the Tempo quantum systems are impressive. With a road to a 2-million-physical-qubit system by 2030, count me as unsurprised if IonQ were to be a much larger company in four and a half years’ time if management ends up delivering such a system.
Rigetti Computing
Rigetti Computing (NASDAQ:RGTI) shares have seemingly come from out of nowhere, gaining over 1,400% in a year to become a $5.2 billion company. Though it’s still smaller than IonQ, I find the name to be worth following as quantum starts to overtake AI in terms of tech headlines. Recently, Rigetti experienced a breakthrough of its own as it achieved a 99.5% two-qubit gate fidelity rate with its modular 36-qubit quantum computer.
In simple terms, Rigetti solved a massive problem of quantum computing (hefty error rates) with a unique technique that may very well pave the future path for further quantum advancement. It’s not a mystery as to why investors have been so excited about the name. If Rigetti can scale up, perhaps it can outperform its rivals once it’s ready to take on the market.
In short, IonQ appears closer to commercialization, with a heftier market cap, seemingly better financials, and, perhaps most notably, its impressive trapped ion qubit technology. However, I wouldn’t sleep on Rigetti, given there’s also a time and a place for superconducting qubits, and management’s ability to tackle incredibly complex challenges.
The bottom line
It’s tough to pick just one quantum stock as they both near new highs. I think there’s a good chance they move together, since any positive news for one firm is likely to lead to strength across the broader group of industry players.
At this juncture, Wall Street seems a tad more upbeat about IonQ, with one big-name analyst in Benchmark’s David Williams recently assigning a $55.00 price target representing a 28% gain from current levels. Given this, perhaps IONQ deserves the slight edge.
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