Q1’s Rising Stars: 3 Quantum Computing Stocks for Your Must-Watch List

Stocks to buy

If you’re searching from quantum computing stocks to add to your portfolio, look no further. With disruptive trends in high-tech such as generative artificial intelligence (AI) demanding increased efficiency and speed, quantum computing has become the next hot term investors are talking about with the potential to catalyze the next technological revolution. With quantum computing’s unique use of qubits allowing for exponentially faster optimization speeds for many interdisciplinary fields, it’s no wonder that the global quantum computing market is projected to have a CAGR of 38.3% from 2023 to 2028.

To understand why quantum computing has such high optimism from investors, it’s important to understand that it holds valuable drivers from almost every single sector. Whether that be by holding the opportunity to speed up transaction and risk processing models in the banking industry, decrease costs and development time for biopharmaceutical companies, or improve battery optimization and energy infrastructure for electric vehicle manufacturing, quantum computing presents an undeniably attractive offer. As such, in this article, we will highlight three quantum computing stocks that should be on every investor’s watch list. 

Quantum Computing Inc (QUBT)

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Quantum Computing Inc (NASDAQ:QUBT) is a company that works on developing advanced computers using quantum mechanics. These computers can solve complex problems much faster than regular computers. The stock is down over 50% in the past year but has an average Yahoo! Finance analyst one year price target of $8.75, far above the current price of 80 cents. 

The company currently has a market cap of $60.43 million making it one of the smallest companies in the stock market. This can be a great aspect for investors since the stock is still very hidden in the current moment and has a ton of potential ahead of it. With a recent partnership with NASA, the company is making big moves to set itself up for the future. 

The company currently has a price-to-book ratio of 0.71x which is far below the sector median of 3.00x. With this difference, the company is likely to be relatively undervalued. Additionally, EPS is set to soar in the coming year with an expected increase of 39.13% from last year. 

Alphabet Inc (GOOG, GOOGL)

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Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is an international technology giant that is revolutionizing the world around us, including AI, search engine technology, e-commerce, consumer electronics, and last but not least, quantum computing. Yahoo! Finance analysts estimate it will trade within a one-year price range of $130-$170, averaging at around $147.60.

Alphabet’s new Quantum AI proves its advancements as an open-source framework for programming quantum computers. Furthermore, its Quantum Virtual Machine enables the user to emulate a Google quantum computer.

Alphabet’s year-over-year (YOY) revenue growth of 5.32% stands ~83% higher than the sector median of 2.90%. While this growth percentage itself might seem small for such a large company, the fact that it is able to compete and have sustainable and quite sizable growth is impressive. Similarly, its EBITDA margin of 32.33% is at a ~66% increase to the sector median of 19.46%. This shows how even in such a saturated tech market, Alphabet is not only decently profitable but also more profitable than its competition.

Honeywell International Inc. (HON)

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Honeywell International Inc. (NASDAQ:HON) is an engineering and technology company whose quantum computing division, Quantinuum, is pushing the boundaries of quantum computing innovation using trapped-ion architecture to hasten information processing. Yahoo! Finance reports that 21 analysts predict Honeywell will trade within a one-year range of $175-$250 with a mean of $215.

Recently, Quantinuum produced the first scalable models using world-class processors and qubit reuse technology where its quantum computers can process data, with applications ranging from classifying movie reviews to DNA sequencing. The company also just announced that it received an additional $300 million in funding which brings its valuation to around 5 billion dollars. Receiving this money provides Quantinuum with the capital to fund its R&D and quickly bring fault-free quantum computers and improvements to its software to the market. 

Within the past three years, the company’s EPS has grown a staggering 20% and has a profit growth of 18%. Additionally, its price-to-earnings ratio of 24.53 sits quite fairly compared to its five-year average of 25.47. Overall, Honeywell’s Quantinuum is a safe investment with consistent innovation and tremendous growth potential that is a must watch among quantum computing stocks into the foreseeable future.

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.

Chandler Capital is the work of Ian Hartana and Vayun Chugh.

Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.

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