Forget IonQ: 3 Quantum Computing Stocks to Buy Instead
Discover the safer side of quantum computing investments and how to diversify your portfolio with this next-generation technology.
IonQ's Speculative Nature and High Valuation
IonQ, a pure-play quantum computing company, has captured attention with its promise to revolutionize various industries. However, its high valuation and speculative nature should inspire caution. Despite a 45% price drop from its yearly highs, the stock has doubled in value over the past year and trades at an astonishing 113 times sales. With an unprofitable business model and no functioning system shipped yet, IonQ's long-term prospects remain uncertain.
Investors seeking a more stable alternative in quantum computing should explore the following three companies with established track records.
Intel: Semiconductor Giant Expanding into Quantum Computing
Intel, a semiconductor leader, has been researching quantum computing since 2015 and shipped its Tunnel Falls quantum system with 12 qubits to research partners. Leveraging its foundational semiconductor business, Intel has the financial stability and extensive R&D resources to make significant progress in quantum computing. The company's dominant position in the sector gives it a competitive advantage, and its manufacturing capabilities may play a crucial role in scaling up quantum technology for mass-market use.
With $11.5 billion in annual operating cash flows and $7 billion in cash reserves, Intel's financial health surpasses IonQ by a wide margin. The company's exploration of quantum computing is further supported by its existing client computing, data center, and internet of things solutions.
IBM: Quantum Systems and Cloud-Based Access
International Business Machines (IBM) has been actively involved in quantum computing since 2016. Through its cloud computing platform, IBM offers access to advanced quantum systems with up to 1,121 qubits. The company focuses on making quantum computing accessible to researchers, developers, and organizations worldwide. IBM's innovative approach of knitting smaller quantum modules into larger systems provides exponentially higher processing capacity.
Amid its transition to a hybrid cloud and AI company, IBM's robust revenue growth provides a solid foundation for its quantum computing initiatives. With a cash flow of $14 billion in 2023 and $13.1 billion in cash and equivalents, IBM demonstrates financial stability to support its extensive R&D efforts.
Honeywell: Industrial Giant with Quantum Computing Ventures
Honeywell, known for its industrial and aerospace products, has been involved in quantum computing since 2014. The company has a majority ownership stake in Quantinuum, a stand-alone entity it created in partnership with Cambridge University. Quantinuum focuses on accelerating quantum computing advancements and practical applications in materials science and optimization problems.
Drawing from its diverse industrial presence, Honeywell maintains a strong financial foundation necessary for sustained investment in quantum computing technologies. With $5.3 billion in cash from operations and $7.9 billion in cash equivalents, Honeywell demonstrates its commitment to quantum exploration and creating positive transformations in various industries.
