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In my last article on quantum computing stocks entitled Quantum Computing: 12 Stocks For What The Future May Hold I mentioned that the size of the quantum computer market is expected to grow dramatically in the next 10 years which should present an incredible opportunity for investors. 

The $64M question, however, is "Which semiconductor stocks are positioned to make the most of this exceptional growth?" and, to that end, this article examines 12 such stocks that are heavily involved in the research and development of qubits and whose stock appreciation in 2023 reflect the success of their efforts. Below are descriptions of each of the 12 companies and how their stocks performed in August, in descending order, and in July and YTD. All the stocks have market capitalizations in excess of $50B except IonQ ($3.55B), Rigetti Computing ($245M), and D-Wave Quantum ($163M) and all the stocks are trading in excess of $35/share except IonQ ($17.20), Rigetti Computing ($1.79), and D-Wave Quantum ($1.16). 

1. Nvidia Corporation (NVDA): UP 5.6% in August; (UP 10.5% in July); UP 237.8% YTD
   • has introduced a platform to construct quantum algorithms by employing widely known classical computer coding languages which have the ability to choose whether to run the algorithm on a classical computer or quantum computing based on efficiency and is the leading designer of graphics processing units required for powerful computer processing.
   • Read:
     • Nvidia stock: 'The easy money has been made,' strategist says 
     • Nvidia is the AI king, but threats to its reign abound
2. Amazon (AMZN): UP 4.4% in August; (UP 1.4% in July); UP 64.3% YTD
   • has partnered with the California Institute of Technology to foster the next generation of quantum scientists and fuel their efforts to build a fault-tolerant quantum computer.
   • Read:
     • Of All the AI Stocks, These 2 Impressed Me the Most This Earnings Season
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3. Alphabet (GOOGL): UP 2.7% in August; (UP 10.8% in July); UP 54.4% YTD
   • has already built a programmable superconducting processor that is about 158 million times faster than the world’s fastest supercomputer. and is continuing to push innovation in quantum computing, from hardware control systems and quantum control to physics modeling and quantum error correction.
   • Read:
     • Google's patent may save some power on AI development; 
     • Alphabet Focuses on Efficiency with New AI Chip
     • Google unveils new AI products at 2023 Cloud Next event;
4. IBM (IBM): UP 2.4% in August; (UP 7.2% in July); UP 4.2% YTD
   • plans to develop a multichip processor that is 860% faster than its current fastest processor by 2025 and have its quantum computers commercialized within 5 years.
   • Read:
     • IBM Collaborates With Salesforce to Accelerate AI Adoption
     • IBM Unveils Enterprise-Focused Advanced AI Platform Watsonx
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5. Microsoft (MSFT): DOWN 3.1% in August; (DOWN 0.6% in July); UP 36.7% YTD
   • is developing a quantum machine using a proprietary control chip and a cryo-compute core that work together to maintain a stable cold environment and offers a portfolio of quantum computers from other hardware providers as a service to provide an open development environment for researchers, businesses and developers that enables the flexibility to tune algorithms and explore today's quantum systems.
   • Read:
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6. IonQ (IONQ): DOWN 4.1% in August; (UP 32.5% in July); UP 398.6% YTD
   • uses trapped-ion technology in its processing units which relies on suspending ions in space using electromagnetic fields, and transmitting information through the movement of those ions in a “shared trap” and currently has 2 quantum systems: an 11-qubit system launched in 2020; a 25-qubit system launched in 2022; and has a 32-qubit system under development and in beta testing with researchers.
   • Read:
     • 5 ‘Strong Buy’ Quantum Computing Stocks You Should Be Loading Up On Now
     • Ride the Quantum Computing Wave to Riches With These 3 Promising Stock Picks
     • IonQ and BearingPoint Bring Quantum Consulting to the European Market
7. Intel (INTC): DOWN 4.6% in August; (UP 10.1% in July); UP 33.0% YTD
   • has constructed a 49 qubit superconducting chip and has developed a testing tool for quantum computers which allows researchers to validate quantum wafers and check that their qubits are working correctly before they are constructed into a full quantum processor.
   • Read:
     • 2 Artificial Intelligence (AI) Dividend Stocks You Can Confidently Buy Now
     • Intel says new 'Sierra Forest' chip to more than double power efficiency
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8. Taiwan Semiconductor (TSM): DOWN 7.2% in August; (No Change in July); UP 25.6% YTD
   • plans to use its new cloud computing platform to develop quantum computing applications.
   • Read:
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9. Alibaba Group (BABA): DOWN 7.6% in August; (UP 20.6% in July); UP 14.0% YTD
   • is investing heavily in quantum computing research and building a quantum computing chip based on superconducting qubit technology.
   • Read:
     • Wall Street Bulls Look Optimistic About Alibaba (BABA): Should You Buy?
     • Alibaba and Other China Stocks Rise Again. Why Long-Term Gains May Be Harder
     • China leaps forward in the A.I. arms race as Alibaba releases a new chatbot that can ‘read’ images
10. Baidu (BIDU): DOWN 8.0% in August; (UP 8.4% in July); UP 25.0% YTD
    • has developed a quantum computer with a 10 qubit processor and has developed a 36-qubit quantum chip.
    • Read:
      • Baidu, SenseTime Among First Firms to Win China AI Approval
      • Better Chinese Tech Stock: Alibaba vs. Baidu
      • China's Baidu makes AI chatbot Ernie Bot publicly available
11. Rigetti Computing (RGTI): DOWN 18.6% in August; (UP 86.4% in July); UP 145.2% YTD
    • only has a market capitalization of $245M
    • has a short interest of 7.6%
    • is currently developing a new 84-qubit processor with plans to put four such processors together to form a 336-qubit machine and also has plans to build a processor that can support 1,000 qubits in 2025 and one with 4,000 qubits in 2027.
    • Read:
      • 5 ‘Strong Buy’ Quantum Computing Stocks You Should Be Loading Up On Now
      • Want to Get Rich? 3 Game-Changing Quantum Computing Stocks to Buy Right Now
      • Rigetti: A Quantum Computing Company to Monitor
12. D-Wave Quantum (QBTS): DOWN 44.8% in August; (No Change in July); DOWN 19.4% YTD
    • only has a market capitalization of $163M
    • was the world's first organization to sell a commercial quantum computer (to Lockheed Martin back in 2011) using a process called quantum annealing and has recently entered a multi-year agreement with Lockheed Martin to upgrade its quantum computer system with 1,000+ qubits.
    • Read:
      • 5 ‘Strong Buy’ Quantum Computing Stocks You Should Be Loading Up On Now
      • Ride the Quantum Computing Wave to Riches With These 3 Promising Stock Picks
      • D-Wave Announces Increased Performance of Newest Quantum Hybrid Solver Available in the Leap Real-Time Quantum Cloud Service

The above 12 stocks were, on average, DOWN 0.2% in August, UP 6.9% in July and are UP 61.4% YTD. 

Investing In Quantum Computer Stocks

It is still too early to determine the best quantum computing stocks to invest in because the technology is rapidly advancing with several competing approaches so, rather than choosing a specific stock, investors might want to buy either:

• the iShares Semiconductor ETF (SOXX), with 35 constituents and $0.35 in expenses (DOWN 4.6% in August; (UP 5.5% in July); UP 46.8% YTD) or
• the Invesco PHLX Semiconductor ETF (SOXQ) of 33 constituents and expenses of $0.19 (DOWN 4.5% in August; (UP 2.0% in July); UP 46.0% YTD).

Naturally, it is imperative that you do your own due diligence before making a decision to do so as my comments are not recommendations, per se. I hope this article has made you aware of the opportunities.

Conclusion

The 12 stocks reviewed above showed virtually no change in value, on average, in August, indicating that the bubble in quantum computing stocks remains inflated. That being said,  only 4 of the stocks were up in August  compared to 11 in July, so the sector bears watching closely. 

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