The 3 Hottest Quantum Computing Stocks to Watch in 2024

Stock Market

With the technology machinery running at full speed, forward-looking investors should consider the hottest quantum computing stocks for the prospect of robust profitability. To be sure, the pure-play ecosystem presents high risks. At the same time, the potential paradigm shift involved in quantum computers makes the bullish case incredibly enticing.

Essentially, the innovation empowers simultaneous multi-tiered data transmissions at a level that classical computers could never hope to achieve. That’s because the latter category is effectively a binary proposition. To solve a multi-tiered problem, it must first tackle the earlier iteration before resolving the subsequent challenges.

Quantum computers? They can address multiple problem sets, in part because the underlying qubit can exist in two physical states – owing to the straight-up weird phenomenon of quantum mechanics – at one time. Bottom line, it opens doors previously considered permanently closed, thus undergirding hot quantum stocks.

For full disclosure, the sector is very much young and there will almost certainly be growing pains. So, don’t play in this sandbox if you can’t handle volatility. Still, if you can accept the risk-reward profile, these hottest quantum computing stocks deserve a closer look.

Alphabet (GOOG, GOOGL)

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While internet and tech innovation juggernaut Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) may be a mature – and thus “boring” – idea, GOOG should help you on the road to the hottest quantum computing stocks that are proven viable. Analysts agree, rating shares a consensus strong buy with a $155.60 average price target. The high-side target lands at $160.

Through its Google Quantum AI team, Alphabet represents a major player in the research and development of superconducting quantum processors and software tools. So far, the company has achieved significant milestones in demonstrating its quantum supremacy. Enticingly, the quantum computing market could be worth $6.5 billion by 2028, representing a CAGR of 48.1% from 2023.

Although GOOG is unquestionably one of the hot quantum computing stocks, the main difference between parent Alphabet and the competition centers on the primary focus. Alphabet is more research oriented and it can afford to do so thanks to its robust financials.

In other words, it’s not one of the hottest quantum computing stocks based on upward mobility potential. However, you can trust Alphabet to be around in the next hundred years.

D-Wave Quantum (QBTS)

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Based in Canada, D-Wave Quantum (NYSE:QBTS) claims to be the world’s first company to sell computers that exploit quantum effects in their operation. It carries serious clout, with D-Wave’s early customers stemming from esteemed names like Alphabet’s Google and the University of Southern California. Analysts anticipate great things from QBTS, pegging it a unanimous strong buy with a $2.17 price target. That makes it one of the hottest quantum computing stocks based on implied growth.

Fundamentally, D-Wave is relevant to the discussion thanks to its specialty in building annealing quantum computers. These devices are specifically designed for solving so-called optimization problems, such as logistics, scheduling and financial modeling. Further, D-Wave’s processors are based on superconducting qubits arranged in a chimera topology. This distinct profile enables the company to tackle specific challenges at a much faster clip than classical computers.

Financially, the risk for QBTS is that it’s largely a narrative play. For example, shares trade at a trailing-year revenue multiple of 12.62X. Needless to say, that’s sky high. However, with the projected growth of the underlying field, QBTS might be an opportunity based on where it might go.

Rigetti Computing (RGTI)

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Headquartered in Berkeley, California, Rigetti Computing (NASDAQ:RGTI) develops quantum integrated circuits (ICs). An IC is basically a canvas of semiconductor wafers with millions of tiny resistors, capacitors and other components. Rigetti also develops a cloud platform called Forest that enables programmers to write with quantum algorithms. Analysts love RGTI, rating shares a unanimous strong buy with a $3. That also makes it one of the hottest quantum computing stocks based on implied shareholder profit.

As mentioned above, Rigetti lays a stake in the quantum field through its software platform. Beyond providing tools for algorithm design, Forest enables quantum circuit development and error correction. Therefore, it caters to both researchers and developers who may be working on different quantum applications. Further, the company aims to introduce practical applications in areas like materials science, chemistry and even financial modeling.

According to investment data aggregator Gurufocus, Rigetti’s projected future three-to-five-year revenue growth rate clocks in at 45.29%. That would be impressive if it comes true. However, investors should realize that right now, RGTI trades at 7.93X trailing-year sales, which is significantly overpriced. Still, if you anticipate a bright future, Rigetti could be one of the hot quantum computing stocks to consider.

On the date of publication, Josh Enomoto 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.

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