16th Dec 2021
“The future is not something we enter. The future is something we create.” – Leonard Sweet
Once thought of as a vast, uncharted territory, quantum computing is being developed to solve complex problems at lightning speed. Quantum computers have the potential to harness big data, make sophisticated predictions, utilize machine learning, and make artificial intelligence a meaningful part of our everyday lives.
For decades, computers were limited in their ability to store information in binary bits, as either a zero or a one. Quantum computing consists of quantum bits, or qubits, which can be zero, one, or both simultaneously. This seemingly simple difference makes all the difference. Because quantum computers are not limited by a binary or sequential framework, they can calculate in seconds what would take weeks for even a supercomputer to solve. Quantum computers can quickly and accurately gather, absorb, and optimize quantities of information that could not be handled previously.1
Quantum computing is still in its early stages, but it is set to cause shockwaves similar to those felt by the advent of the first PC. Quantum shows great promise in fundamentally altering how artificial intelligence will become integrated into daily life. Quantum’s most meaningful impact is expected to happen in the next five to 10 years, according to Gartner analysts. 2
What is the future of quantum computing, and how will it harness artificial intelligence to revolutionize industries such as medicine, finance, energy, and logistics? While the scope of quantum’s transformative power is yet unknown, big companies are scrambling to invest in quantum computing. A major goal these companies share is to achieve quantum supremacy, in which a quantum computer carries out a calculation so advanced that it could not have been performed by a traditional (or even super) computer.
For bold investors, it’s an ideal time to invest in quantum computing. Here are our picks for the potentially best quantum computing stocks.
1. QTUM The Quantum Computing ETF
Launched in September 2018, Defiance’s QTUM is an exchange-traded fund, or ETF, that focuses on the next generation of computing. QTUM offers investors research-based exposure to a diversified composite of companies that are leading the way in the quantum computing space.
An ETF such as QTUM invests in companies involved in the disruptive technologies of machine learning, cloud computing, and quantum computing. The BlueStar Quantum Computing and Machine Learning Index is the underlying index, and it tracks over 70 globally-listed companies throughout the quantum market. The index is rules-based and encompasses equity securities involved in the research, development, and commercialization of systems and materials used in quantum computing.
The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance narrative quoted. Performance current to the most recent month-end can be obtained by calling (1-833-333-9383)
2. IonQ Inc. (IONQ)
Fresh to the market, IonQ just went public through a SPAC, or special purpose acquisition company, in October of 2021. IonQ reverse-merged with dMY Technology Group III and then began trading on the NYSE.
With roots in the University of Maryland, IonQ is one of the few companies directly developing quantum computing systems. IonQ recently reported an important breakthrough in error correction technology for quantum computers that will allow the company to minimize qubit cost and correct errors when needed.3
While IonQ is relatively unknown and generated no revenue in 2020, remember that the quantum computing space is poised to move at, well, quantum speed. Utilizing the power of ionized atoms allows IonQ’s computers to perform longer, more complex calculations with fewer errors than any quantum computer yet built. The company has the backing of well-known investors, among them Bill Gates4. While IonQ is quite a speculative investment at this stage, it could be worthwhile for those looking to take a risk with growth potential.
3. Analog Devices, Inc. (ADI)
If quantum computing grows to be as big as some insiders predict, related suppliers such as semiconductors are expected to become increasingly important. A leading semiconductor company to watch is Analog Devices, Inc. (ADI), which designs, tests, and markets integrated circuits used to process analog and digital signals. ADI’s processing chips are vital to today’s digital economy and are used in data converters, high-performance amplifiers, radiofrequency, and microwave-integrated circuits. ADI has a market cap of over $88B, and in a recent secondary offering, the company priced notes worth $4B.5
Its recent acquisition of Maxim Integrated Products, Inc. (MXIM) should solidify ADI’s role as a leading analog semiconductor company that helps customers solve increasingly complex problems. Several weeks ago, ADI announced that its wireless battery management systems would be used in UK-based electric vehicle manufacturer Lotus Cars. These and other innovations allow ADI to take an active role in fields such as healthcare, automotive ecosystems, connectivity and data centers, aerospace, and more. 6
4. Rigetti Computing (RGTI)
In October, full-stack quantum computing company Rigetti Computing announced its intention to go public by merging with SPAC Supernova Partners Acquisition Co. II. Rigetti Computing designs quantum chips, integrates those chips with a controlling architecture, and develops software that programmers use to build algorithms for the chips.
Rigetti CEO and founder Chad Rigetti holds a Ph.D. from Yale and has a background in IBM’s quantum computing group. Rigetti ambitiously claimed, “In the next decade, one Rigetti computer could be more powerful than today’s entire global cloud.”7
Rigetti Computing is one of the foremost innovators in quantum technology, seeking to create a scalable computer and high-performance integration with computing systems already in place. At its public offering, Rigetti Computing was valued at about $1.5B and received $458M in gross cash proceeds. Rigetti’s plans are to use the proceeds from the deal to accelerate the development of generations of quantum processors and to grow its commercial business. Insiders have suggested that Rigetti’s revenue will grow to reach nearly $600M by 2026.8
5. Ambarella, Inc. (AMBA)
Fabless semiconductor developer Ambarella is another stock to watch. Fabless chip makers produce hardware and semiconductors for technology devices but do not manufacture the physical chips, instead outsourcing their fabrication to a manufacturing foundry.
Ambarella’s products utilize artificial intelligence in a wide range of human and computer vision applications such as autonomous vehicles, video security, drones, action cameras like GoPro, and more. Through low-power, high-resolution video compression, image processing, and deep neural network processors and software, Ambarella makes cameras more intelligent and allows users to extract valuable data from video streams.9
Ambarella recently announced a tentative agreement to acquire Oculii, whose adaptive AI software algorithms enable radar perception using current radar chips to achieve up to 100x higher resolution, longer range, and greater accuracy.10 Ambarella’s stock has gained 234.3% over the past year,11 making it a stock to watch in the semiconductor space.
The exciting field of quantum computing may still be in its early stages, but the two recent SPAC deals are further of its rapid development and real potential. The future of computing promises to go beyond binary. Investors following this developing technology will want to consider these and other quantum computing stocks or opt for the broader exposure of a quantum computing ETF.
1 How to invest in quantum computing https://www.state-journal.com/sponsored/how-to-invest-in-quantum-computing/article_cfcd8fcc-337b-11ec-8db9-b3b221e9ab8a.html
2 Here’s how quantum computing could transform the future https://www.businessinsider.com/quantum-computing-investing-computers-enterprise-2021-3
3 4 Quantum computing stocks to add to your portfolio https://stocknews.com/news/amat-adi-amba-ionq-4-quantum-computing-stocks-to-add-to-your-portfolio/
4 IonQ stock is risky, but it’s a worthwhile quantum computing play https://investorplaIonQ Stock Is Risky, But It’s a Worthwhile Quantum Computing Playce.com/2021/10/ionq-stock-is-risky-but-its-a-worthwhile-quantum-computing-play/
5 3 Stocks insiders are buying https://www.benzinga.com/news/21/10/23298122/3-stocks-insiders-are-buying
6 Analog Devices, Inc. Infographic https://investor.analog.com/static-files/376ce7c7-c3cf-4af9-ba1d-0212eb3beb9c
7 7 Quantum computing stocks to buy as Rigetti computing comes public https://investorplace.com/2021/10/7-quantum-computing-stocks-to-buy-as-rigetti-computing-comes-public/
8 Quantum hardware startup Rigetti Computing to go public https://www.geekwire.com/2021/quantum-hardware-startup-rigetti-computing-go-public-1-5b-spac-deal-ex-zillow-ceo/
10 Ambarella to acquire Oculii; radar perception AI algorithm global leader https://finance.yahoo.com/news/ambarella-acquire-oculii-radar-perception-200500220.html
11 4 Quantum computing stocks to add to your portfolio https://stocknews.com/news/amat-adi-amba-ionq-4-quantum-computing-stocks-to-add-to-your-portfolio/