While Wall Street seemingly can’t get enough of artificial intelligence, a paradigm shift in the computing ecosystem could draw more eyeballs to quantum computing stocks. According to Investopedia, the underlying arena leverages the principle of quantum theory, which “explains the behavior of energy and material on the atomic and subatomic levels.”
Now, we don’t need to turn this article into a science journal. However, when one of the fascinating components of quantum mechanics is the ability for particles to exist in more than one state at the same time. As it relates to the digitalization protocol, quantum computers could theoretically solve and run multiple problems and processes simultaneously. It’s a massive accelerant compared to the classical approach, making quantum computing stocks a must-watch arena.
To be sure, it’s a young and burgeoning field. What I’m trying to say is that myriad risks exist. Nevertheless, this innovation can swing open doors regarding productivity acceleration and even the strengthening of national security.
If you can handle the risk, below are compelling quantum computing stocks to buy and hold.
In recent years, I’ve shied away from running my mouth against the collective wisdom of Wall Street analysts. They get paid tons of money so they should know what they’re doing (I guess). But when it comes to IBM (NYSE:IBM), I’m going to make an exception. It’s easily one of the quantum computing stocks to buy and hold.
You can make the argument that if there’s any enterprise that truly meets that definition – for instance, if you theoretically had to make a claim under oath – IBM stands alone. Yes, it’s a consensus hold and yes, the average price target of $163.85 implies significant downside risk. I’m undeterred. First, we’re talking about a company that was around when William Howard Taft was the President of the United States. It’s staying for the long haul.
More importantly, IBM delivered profound innovations in artificial intelligence, machine learning and enterprise cybersecurity. It continues to push the envelope with its various quantum computing technologies. While you’re waiting for the narrative to pan out, Big Blue offers a forward dividend yield of 3.84%. Combined with an undervalued forward earnings multiple of 17.49X, IBM makes a great case for quantum computing stocks.
Source: Evolf / Shutterstock.com
I’ve also been avoiding talking about this next company but for basically opposite reasons to IBM. Seemingly, no one can get enough of Nvidia (NASDAQ:NVDA). With its advanced graphics processing units (GPUs) undergirding AI applications, NVDA managed to skyrocket last year. Even more impressive, it has taken the momentum into this year. Since the beginning of January, NVDA popped up nearly 24%.
To be sure, analysts peg NVDA as a consensus strong buy – and that’s not a cheap assessment either. It breaks down as 33 buys and four holds. No one’s going to be reckless enough to issue a sell rating. However, the concern many have is that NVDA lacks the legs to complete another marathon. Still, the experts disagree, projecting a price target of $674.68 or over 13% up.
While Nvidia generates headlines for its AI-related products, it’s also investing in quantum computing. Last year, the enterprise announced a new system to help build new applications that combine quantum with the most advanced classic computing hardware. With so many relevancies in key areas, NVDA legitimately makes a case for quantum computing stocks to buy and hold.
D-Wave Quantum (QBTS)
Source: T. Schneider / Shutterstock
Moving into the pure-play arena of quantum computing stocks, D-Wave Quantum (NYSE:QBTS) claims to be the world’s first company to sell computers that exploit quantum effects in their operation. While that may sound like an outrageous statement, D-Wave backs up the hype with substance. Specifically, it has partnered with several high-profile institutions in the past, including Lockheed Martin (NYSE:LMT) and the University of Southern California.
Looking ahead, D-Wave Quantum may offer the best upside among quantum computing stocks. Currently, QBTS enjoys a unanimous strong buy rating among three analysts within the past three months. If you extend out to the trialing year, that comes out to four buys. Moreover, the average price target clocks in at $2.17, implying over 177% upside potential.
Now, while D-Wave purports to offer quantum applications to address myriad problems from portfolio optimization to traffic congestion, the harsh reality is that QBTS is a literal penny stock. That means it could be a top performer or it could become one of the worst. Still, if you have some pocket change lying around, why waste it? Instead, QBTS seems a solid speculative opportunity.
On Penny Stocks and Low-Volume Stocks:With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand thatInvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:Penny Stocks —How to Profit Without Getting Scammed
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.comPublishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.
More From InvestorPlace
- The #1 AI Investment Might Be This Company You’ve Never Heard Of
- Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The post 3 Quantum Computing Stocks to Buy and Hold Forever: January 2024 appeared first on InvestorPlace.
I'm Josh Enomoto, a former senior business analyst for Sony Electronics with a background in brokering major contracts with Fortune Global 500 companies. My expertise extends across various industries, including legal, construction management, healthcare, and investment markets. I've delivered unique and critical insights into emerging technologies, such as artificial intelligence and quantum computing, as evident in my analysis below.
Now, diving into the article on InvestorPlace, the focus is on quantum computing stocks and their potential in the current market landscape. The piece discusses the paradigm shift in computing towards quantum computing and its leveraging of quantum theory principles to explain atomic and subatomic behaviors.
Let's break down the key concepts mentioned in the article:
Quantum Computing Overview:
- Quantum computing operates on the principles of quantum mechanics, allowing particles to exist in multiple states simultaneously.
- Quantum computers have the potential to solve and run multiple problems and processes simultaneously, providing a significant acceleration compared to classical computing.
- IBM is highlighted as one of the quantum computing stocks to watch.
- Despite being a consensus hold with a perceived downside risk, IBM is recognized for its long-standing presence in the industry and its continuous innovation in artificial intelligence, machine learning, enterprise cybersecurity, and quantum computing technologies.
- IBM offers a forward dividend yield of 3.84% and an undervalued forward earnings multiple of 17.49X.
- Nvidia, known for its advanced graphics processing units (GPUs) supporting AI applications, is mentioned as another quantum computing stock.
- The company has seen substantial growth, with a consensus strong buy rating and a projected price target of over 13% upside.
- Nvidia is actively investing in quantum computing and announced a system to combine quantum with advanced classical computing hardware.
D-Wave Quantum (NYSE:QBTS):
- D-Wave Quantum claims to be the world's first company selling computers exploiting quantum effects.
- The company has partnered with notable institutions like Lockheed Martin and the University of Southern California.
- D-Wave Quantum is considered a pure-play in the quantum computing stocks arena, with a unanimous strong buy rating and an average price target implying over 177% upside potential.
- Despite being a penny stock, it's seen as a solid speculative opportunity.
In conclusion, the article provides insights into the potential of quantum computing stocks, emphasizing IBM, Nvidia, and D-Wave Quantum as noteworthy players in this burgeoning field. It acknowledges the risks associated with the young industry but highlights the significant opportunities for productivity acceleration and national security strengthening.