Investing in bleeding edge technology is always tricky. On one side, the same list of tech giants have their fingers in every tech pie. On the other, freshly IPO’d startups have big promises, big hype, but short track records. So how do you intelligently invest in an emerging field like quantum computing?
The answer is—by following the science.
Quantum computers harness the strange properties of matter at the tiniest scale (quantum mechanics). These properties allow quantum computers to perform certain calculations exponentially faster than classical computers—billions to trillions of times faster.
But to harness those properties, quantum computers need a new way to store and process information. They need specialized hardware and software. So to find the best quantum computing companies to invest in, let’s start with how a quantum computer is built.
Qubit ≠ Qubit: Many Ways to Build Quantum Computers
Classical computers (like a smartphone or laptop) store and process information in “bits” (binary digits). This is the smallest unit of information in a computer, and they can exist in a state of either 0 or 1.
There are many viable ways to represent a bit. In a computer, it’s a transistor being flipped ON or OFF. On a hard drive, it’s a tiny magnetic area oriented North or South. On a DVD, it’s a flat or pit on the disc’s surface. But the key is that the two states 0 and 1 are always mutually exclusive.
Now here’s where things get interesting. Quantum bits (qubits) can be in both states at once, as a probability mix of 0 and 1. This is called superposition, and it’s the reason quantum computers can be exponentially faster.
Creating the right conditions for quantum states like superposition is very tricky. Right now, there’s still no consensus on the “best way” to make a qubit. Instead, there are about dozen active research paths, each with pros and cons. Understanding this distinction is the key to investing in quantum computing.
We have a full breakdown of the main types of quantum computers here. But in a nutshell, here are a few of the more popular approaches:
| Qubit Type | Description | Pros | Cons | Key Players |
| Superconducting | Made from superconducting circuits | Faster operations; Well-studied | Need extremely low temperatures | Google, IBM, Rigetti |
| Trapped Ion | Made from ions trapped in electromagnetic fields | Longer quantum states; Easier to scale | Complex setups; Slower operations | IonQ, Honeywell |
| Photonic | Made from photons of light | Works at room temperature; Long-distance | Difficult to control and measure | Xanadu, PsiQuantum |
| Topological | Made from exotic particles called anyons | Inherent error resistance; stable and robust | Still largely theoretical | Microsoft, Google, Intel |
| Spin | Made from the spin state of electrons | Compatible with existing silicon fabrication tools | Difficult to control and measure | Intel, Google, QTech |
| Quantum Annealer | Uses quantum effects to solve optimization problems | Earliest commercial quantum computer | Not universal; Limited problem scope | D-Wave Systems |
Some of these qubit approaches are already quite mature, with a clear roadmap forward. Others are still in their early stages. But all have high-profile advocates pouring billions into their research and development.
Best Quantum Computing Stocks in 2023
When investing in quantum computing, remember that it’s still a horse race. Each type of qubit has its own obstacles on the road to commercial viability. All it would take is one key breakthrough for one type of qubit to leapfrog the others.
To be clear, more than one horse can win this race. Different types of qubits are better suited for different problems. It’s not a bad idea for investors to diversify across different qubit types.
The best quantum computing stocks and companies fall under three main buckets:
- Pure-play quantum computer stocks: These will benefit the most from demand for quantum computing.
- Tech giants with big quantum computing divisions: These are safer bets, but their existing size means lower potential upside.
- Quantum computing enablers: These play supporting roles. They offer investment angles outside quantum computing hardware.
Please note: The following is in not financial advice and is not an endorsement of the stocks. This list is for informational purposes only. Please do your own due diligence.
Pure-Play Quantum Computer Stocks
If your goal is to invest in quantum computing, then the best place to start are the companies that make the quantum processors. Pure-play quantum computing companies are the ones that design and manufacture the chips that actually contain the qubits. These tend to be smaller companies, many of which are former startups that recently IPO’d.
Rigetti Computing (RGTI)
Rigetti is a leader in superconducting qubits, the most widely studied type of qubit. This is a huge advantage, as the scientific community often collaborates and shares findings. Many big milestones, like Google’s demonstration of “quantum supremacy” in 2019, used superconducting qubits.
Rigetti benefits from aligning research paths with the big players like IBM and Google. However, Rigetti is smaller and only focused on quantum computing. That makes Rigetti an efficient pure-play bet on the current “front-running” qubit technology.
IonQ (IONQ)
IonQ gets the honor of being the first publicly traded pure-play quantum computing company. It’s also quite unique in its focus on trapped ion qubits. Trapped ion qubits are less popular than superconducting qubits, but popularity isn’t everything.
For example, trapped ion qubits can stay in their quantum states longer, which could make them easier to scale in the long term. So while this technology is less mature right now, it could be impactful in the future. IonQ is an efficient bet on trapped ions as a leading alternative.
D-Wave Systems (QBTS)
D-Wave Systems is the odd one out among pure-play QC stocks. D-Wave was the first to sell a real quantum computer. But the company focuses only on quantum annealers. Quantum annealers are great for optimization, but cannot solve all types of quantum problems.
D-Wave’s computers have limited use cases, and are not as versatile as Rigetti’s or IonQ’s. Of course, that use case (optimization) is still a huge one with enormous market potential. Finance, telecom, energy, machine learning—all rely heavily on optimization.
Tech Giants With Big Quantum Divisions
Big tech companies are a safer way to start investing in quantum computing. Most tech giants have at least thought about entering the quantum computing space. The technology is simply too important to ignore. Here are the ones that are especially relevant.
Alphabet / Google (GOOG)
Google is known for being involved in nearly every piece of emerging tech. Healthcare tech? Google does it. Self-driving cars? Google does it. Cloud gaming? Google… did it (let’s pour one out for Stadia). Quantum computing is no different.
In 2019, Google claimed it had achieved quantum supremacy. This is when a quantum computer does something that’s practically impossible for a classical computer. According to Google, its 53-qubit quantum chip took 200 seconds to solve a problem that would’ve taken IBM’s supercomputer 10,000 years.
IBM (IBM)
Of course, IBM immediately disputed Google’s claims. IBM countered with a host of caveats and corrections. But whether those were legitimate criticisms or sour grapes, IBM is clearly the other behemoth in quantum computing.
IBM has a long-term vision for a ‘quantum-ready’ world, starting with quantum cloud computing. It also launched the IBM Quantum Network to cooperate with others. IBM has serious hardware goals too, with the ambitious target of a 4000-qubit processor by 2025.
Honeywell (HON)
Honeywell is an industrial giant. It has deep roots in sectors like aerospace and home automation. So of course you might be wondering, why quantum computing?
As it turns out, it’s not a bad fit at all. Like IonQ, Honeywell focuses on trapped ion qubits. Trapped ion systems are hard to set up, requiring special vacuums, lasers, and magnetic fields. All these devices fall under Honeywell’s wheelhouse, thanks to its experience in aerospace.
Microsoft (MSFT)
Microsoft is leading the charge into topological qubits. These use “topological states to store information non-locally.” That’s just a fancy way of saying they’re naturally more resistant to noise. They can keep their quantum states longer, making them easier to scale.
That sounds too good to be true, right? Well, it is—for now at least. Topological qubits could indeed lead to larger “fault-tolerant” quantum computers, but they’re still quite theoretical.
Intel (INTC)
Intel is a semiconductor giant that focuses on spin qubits. Spin qubits are attractive because they can work at higher temperatures. Spin qubit computers could be much easier and cheaper to build, without requiring complex contraptions.
Spin qubits could also be made using the same processes that are used to make computer chips today. With spin qubits, we wouldn’t need new, specialized factories. Instead, Intel could simply adapt its existing factories to make quantum computers at scale.
Quantum Computing Enablers
Last but not least, we have the enablers. These companies serve key supportive purposes, but they don’t make quantum processors themselves. Instead, they make it easier to build or access quantum computers. These companies offer alternative angles to invest in quantum computing.
Nvidia (NVDA)
Nvidia is mainly known for its GPUs, or graphical processing units. These GPUs are already used in complex computing tasks like machine learning, so it’s no surprise Nvidia is now turning its gaze onto quantum computing.
Nvidia’s chips could be especially useful in hybrid platforms for quantum-classical research. In fact, Nvidia has already launched one called CUDA Quantum. So while Nvidia might not be directly making quantum processors, it’s definitely a name to watch.
FormFactor (FORM)
FormFactor makes key tools for testing qubit quality. When trying to build a bigger quantum computer, qubit quality makes a world of difference. If your qubits are fragile and error-prone, it doesn’t matter how many you jam into a processor—it will fail.
That’s why Google, IBM, and Rigetti all use FormFactor’s products to test their qubits. That’s also why investors should pay attention to this company.
Quantum Computing Inc. (QUBT)
Quantum Computing Inc. aims to bridge the gap between classical and quantum computing technology. To do so, it’s building a “hardware-agnostic hybrid platform.” That’s a mouthful, but it’s pretty simple when you break it down.
Hardware-agnostic means it works with processors from different manufacturers. So end users can write algorithms without worrying about the underlying hardware specifics. Hybrid means it can run on both classical and quantum machines. Thus, QUBT aims to be the bridge between the present and future of computing.
