3 Quantum Stocks Primed for the Qubit Breakthrough (2024)

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

AI has dominated the tech space for the past two years; understandably, some investors are starting to think it’s getting overcrowded. The same investors are looking for other sectors in the industry, and quantum stocks are one of the more promising.

Tech experts predict that quantum computing will disrupt the status quo with its ability to solve complex problems and exponentially enhance computation speeds. Additionally, the sector can potentially match and complement AI’s growth, as AI platforms require faster computing speeds to keep up with the demand.

So, it may be time to start looking at promising quantum stocks to get in early. It’s a good thing we have a list of three potential leaders of the quantum revolution for your consideration.

Booz Allen Hamilton Holding (BAH)

Booz Allen Hamilton Holding (NYSE:BAH) is a company that operates as a management and technology consultant for both public and private sector and non-profit organizations. BAH offers expertise in machine learning (ML), artificial intelligence (AI) and quantum computing. The company has built a reputation in various industries like defense, intelligence and healthcare. Its U.S. Space Force engineering contract worth $630 million is a testament to its long-standing pedigree as a go-to consultant.

BAH’s third-quarter finances were exceptional. Revenue grew 12.90%, adjusted net income increased 29.40% and operating income saw a massive 322.20% YoY growth. The company’s VoLT strategy yielded excellent performance and increased resilience, further fueled by strong demand and strategic investments. This helped to continue the company’s upward momentum and strengthened its technological position.

BAH has also kept ahead of its three-year investment thesis goals and raised its lower and higher-end guidance for all metrics for FY’24. Management’s optimism for further growth makes it an attractive candidate as one of the most promising quantum stocks.

D-Wave Quantum (QBTS)

D-Wave Quantum (NYSE:QBTS) is a commercial quantum computing systems, services and software leader. The company specializes in end-to-end quantum computing application development tools, systems, cloud services and professional services for developers and enterprises. QBTS recently announced the inclusion of the “most performant” 1,200+ Qubit Advantage2™ prototype in its Leap™ quantum cloud service. The prototype is available for Leap subscription customers (or as a one-minute trial basis for non-subscribers) and is expected to produce “significant performance gains on hard optimization problems.”

In addition, QBTS is planning to bridge skill gaps needed for the next generation of programmers with its six-module quantum training course called “Foundations for Quantum Programming.”

QBTS’s most recent financials reported a 62% increase in commercial revenue. Bookings for the third quarter went up from $1.9 million to $2.9 million, representing a notable 53% growth. Another excellent metric is its increasing average deal size (or customer spend), which increased by 172% and 178% for commercial and all customers, respectively.

All these improvements strongly point to excellent potential growth for the company. According to CEO Dr. Alan Baratz, D-Wave will play a pivotal role in the quantum computing industry with its transformative shift from research to enterprise value delivery—a sentiment I can agree with entirely. As AI growth accelerates, so too do its energy demands. Quantum computing can potentially alleviate this significant power draw, and D-Wave has already had promising results. Its 2000-qubit quantum system is seen to be 100 times more power-efficient than its classical counterparts.

Investors interested in QBTS might be hard-pressed to find other, more attractive quantum stocks. Analysts rate it a “Strong Buy,” an excellent testament to its potential.

Broadcom (AVGO)

While Broadcom (NASDAQ:AVGO) isn’t known as a quantum company, it already has a foot in the door through investments. The company provides infrastructure software and semiconductor solutions that offer intellectual property (IP) licensing of its product lines and solutions for data movement in enterprise networking, data centers and service providers.

Last year, Broadcom announced the Trident 5-X12, the first switch with an on-chip neural network. The chip utilizes AVGO’s latest NetGNT engine, which can potentially improve artificial intelligence and machine learning workloads through automated congestion control via pattern recognition. The Trident 5-X12 can reduce power consumption by 25% and perform traffic engineering, security and next-generation telemetry.

Broadcom has partnered with Caltech to build a quantum computing laboratory at the university, focusing on quantum computing, sensing, measurement and engineering.

AVGO reported a great fourth quarter. Revenue was up 4% YoY, reaching almost $9.30 billion, and adjusted EBITDA ended at $6.05 billion, representing 65% of revenue. Net income was also $165 million higher YoY, and EPS edged out expectations by 0.89%. The company also hiked quarterly dividends by 14% to $5.25 per share.

Meanwhile, fiscal 2023 revenue closed up 8% YoY, driven by network activity and AI accelerator investments. The VMware acquisition played a significant role in its development, so much so that management expects FY’24’s revenue to reach $50 billion, or about 40% more YoY. So far, AVGO has shown promise, making it one of the solid quantum stocks you can invest in.

On the date of publication, Rick Orford 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.

Rick Orford is a Wall Street Journal best-selling author, investor, influencer, and mentor. His work has appeared in the most authoritative publications, including Good Morning America, Washington Post, Yahoo Finance, MSN, Business Insider, NBC, FOX, CBS, and ABC News.

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.
• It doesn’t matter if you have $500 or $5 million. Do this now.

The post 3 Quantum Stocks Primed for the Qubit Breakthrough appeared first on InvestorPlace.