While investors may recognize prominent names in the tech sector, their involvement in quantum computing might not be as widely understood.
Investors can find quantum computing stocks puzzling. This technology promises exponential increases in computing power; however, it is also prone to significant errors, often likened to a solution in search of a problem.
Both major tech players and emerging startups are investing in this field. Yet, many startups are speculative and often struggle financially, leading investors to consider well-established companies that are developing quantum computing components.
Three companies exemplifying this approach are detailed below. Let’s explore them in more detail.
Alphabet
Google’s parent company, Alphabet (GOOGL, GOOG), has recently garnered investment interest alongside its advancements in artificial intelligence (AI). Investors are particularly focused on initiatives like the Google Gemini update and the AI systems driving its autonomous vehicle segment, Waymo.
However, its progress in quantum computing should not be overlooked. Alphabet has developed large-scale quantum computers aimed at solving the critical issue of error correction, a persistent challenge within the quantum sector.
Intel
Intel (INTC) is another major tech entity that some investors have lost faith in due to its lagging innovation in the chip market. Nevertheless, current CEO Lip-Bu Tan is steering the company towards an engineering-driven culture, concentrating on the realm of quantum computing.
The introduction of its Tunnel Falls quantum chip, available for research, showcases Intel’s commitment to innovation, alongside its Horse Ridge II cryogenic control chip, which addresses scalability issues in quantum technology.
IBM
International Business Machines (IBM) has gained prominence for its cloud computing capabilities but has long been a leader in supercomputing. The company developed its initial quantum computer in 2019 and continues to make strides, recently launching the IBM Quantum Nighthawk, a 120-qubit system designed for greater complexity and lower error rates.
Investors should anticipate more advancements, supported by a projected $14 billion in free cash flow for 2025, allowing significant reinvestment into its business while supporting annual dividends.
