Latest AI Quantum Computing News And Company Stock Performances YTD
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marketsandmarkets.com reports that the global quantum computing market is expected to grow at a compound annual growth rate (CAGR) of 38.3% over the next 5 years from its current US$866M in 2023 to $4.4B by 2028 which should present an incredible opportunity for investors. The $64M question is, however: "Which AI quantum computing stocks are positioned to make the most of this exceptional growth?". To that end, this article examines the top 10 such stocks in munKNEE's AI Quantum Computing Stocks Index that are heavily involved in the research and development of qubits and whose stock appreciation reflect the success of their efforts.
What Is Quantum Computing?
Quantum computing, unlike classical computing where data is known as a bit which can be either 0 or a 1 thus giving it binary qualities, uses qubits instead of bits and they:
- exist in any proportion of both states at the same time (superposition) and
- can be entangled or invisibly connected (i.e., if one qubit is altered, the other reacts at the same time allowing such computers to process vast amounts of information simultaneously) and this permits an enormous leap in processing power.
The munKNEE AI Quantum Computing Stocks Index
To help you assess the merits of the 10 constituents in the Index on a comparative basis the Index provides:
- descriptions of each of the 10 companies in the Index,
- their market share of the current $866M quantum computing market,
- their forward price-to-sales ratio,
- their price/earnings-to-growth ratio and
- how they have performed YTD (as of September 29th), in descending order.
Keeping in mind that the above data changes daily as the stock prices change. All the stocks have market capitalizations in excess of $50B except IonQ @ $3.0B and are trading in excess of $50/share in USD except IonQ @$14.88.
- IonQ (IONQ): UP 331.3% 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”
- currently has 2 quantum systems: an 11-qubit system launched in 2020 and a 25-qubit system launched in 2022 and has a 32-qubit system under development which is beta testing with researchers.
- Quantum Computing Market Share: 1.9%
- *Forward Price-to-Sales Ratio: 157.5
- **Price/Earnings-to-Growth Ratio: N/A
- *** Short Interest: 15.6%
- Read:
- Nvidia Corporation (NVDA): UP 197.7% 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.
- Quantum Computing Market Share: 3.8%
- Forward Price-to-Sales Ratio: 20.0
- Price/Earnings-to-Growth Ratio: 1.2
- Short Interest: 1.1%
- Read:
- Splunk (SPLK): UP 69.9% YTD
- offers a unified security and observability platform that helps security leaders fortify their organization's digital resilience by mitigating cyber risk and meeting compliance requirements
- Quantum Computing Market Share: 0.4%
- Forward Price-to-Sales Ratio: 6.2
- Price/Earnings-to-Growth Ratio: 1.4
- Short Interest: 3.3%
- Read:
- Marvell Technology (MRVL): UP 68.9% YTD
- is the semiconductor industry’s only data infrastructure specialist. It partners with its customers and the open ecosystem to move, process, store and secure the world’s data–transforming data center, automotive, enterprise and carrier architectures for the better.
- Quantum Computing Market Share: 0.6%
- Forward Price-to-Sales Ratio: 8.5
- Price/Earnings-to-Growth Ratio: 2.6
- Short Interest: 1.8%
- Read:
- Advanced Micro Devices (AMD): UP 64.3% YTD
- focuses on CPUs and GPUs and, thanks to this focus, its processors for gaming and data centers have helped drive its revenue higher, even as client sales (meaning chips for PCs) have remained stagnant.
- Also, with the acquisition of Xilinx, AMD is now a major player in the embedded chip market. In the second quarter of 2023, embedded was AMD's fastest-growing segment as chip demand in the automotive, industrial, and other industries continued to rise.
- AMD released the MI300x in June, a chip it called "the world's most advanced accelerator for generative AI." It intends to ramp up production late in the year.
- Quantum Computing Market Share: 2.5%
- Forward Price-to-Sales Ratio: 7.3
- Price/Earnings-to-Growth Ratio: 1.2
- Short Interest: 1.9%
- Read:
- Lam Research (LRCX): UP 55.6% YTD
- is a leading manufacturer of equipment used to fabricate semiconductors focusing on the etch, deposition, and clean markets, which are crucial steps in the semiconductor manufacturing process.
- Quantum Computing Market Share: 2.0%
- Forward Price-to-Sales Ratio: 5.7
- Price/Earnings-to-Growth Ratio: 4.7
- Short Interest: 2.0%
- Read:
- Broadcom (AVGO): UP 48.5% YTD
- 15% of its revenue is directly involved in booming generative AI applications. These include its market-leading switching and routing chips needed to direct data around and between data centers, along with custom ASIC compute offload engines that are now being incorporated into non-Nvidia AI accelerators like Alphabet's tensor processing units.
- Quantum Computing Market Share: 4.1%
- Forward Price-to-Sales Ratio: 9.6
- Price/Earnings-to-Growth Ratio: 1.7
- Short Interest: 1.6%
- Read:
- ON Semiconductor (ON): +47.8%
- provides intelligent sensing and power solutions that enable the electrification of the automotive industry that allows for lighter and longer-range electric vehicles, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems.
- Semiconductor Market Share: 1.0%
- Forward Price-to-Sales Ratio: 4.8
- Price/Earnings-to-Growth Ratio: 2.0
- Short Interest: 6.1
- Read:
- Applied Materials (AMAT): UP 46.9% YTD
- is the world's largest supplier of semiconductor manufacturing equipment, providing materials engineering solutions to help make nearly every chip in the world. The firm's systems are used in nearly every major process step with the exception of lithography.
- Quantum Computing Market Share: 3.1%
- Forward Price-to-Sales Ratio: 4.4
- Price/Earnings-to-Growth Ratio: 2.2
- Short Interest: 2.4%
- Read:
- Micron Technology (MU): UP 42.3% YTD
- has announced that it began sampling its own HBM3 chips in July, which feature a 50% improvement in bandwidth over currently available solutions. Mass production is expected to begin early in calendar 2024, and Micron expects meaningful revenue from this product in fiscal 2024.
- Quantum Computing Market Share: 1.8%
- Forward Price-to-Sales Ratio: 3.6
- Price/Earnings-to-Growth Ratio: NA
- Short Interest: 2.3%
- Read:
The above 10 quantum computing stocks are UP 67.5%, on average, as of the end of September and they represent 21.2%, in total, of the global quantum computing market.
*The Price-to-Sales ratio (PSR) describes how much someone must pay to buy one share of a company relative to how much that share generates in revenue for the company. and, as such, determines whether its stock is cheap or overpriced in comparison to its peers. While the ideal ratio depends on the company and industry, the ratio is typically good when the value falls between one (1) and two (2) and a ratio of less than one (1`) is even better. According to Eqvista (see here), the average ratio for the semiconductor sector is 9.75.
**The price/earnings to growth ratio (PEG ratio) is considered to be an indicator of a stock's true value. A PEG lower than 1.0 is best, suggesting that a company is relatively undervalued.
***A short interest as a percentage of float (source) below 10% indicates strong positive sentiment, above 10% is pretty high indicating significant pessimistic sentiment, and above 20% is extremely high indicating that a high number of shares have been sold short and/or a low number of shares are available to trade meaning that investors have become more bearish and that if a sudden buying frenzy were to occur, short-sellers would have to frantically cover their positions.
Excluded from the above list are:
- Quantum computing and related companies that are listed exclusively on stock exchanges other than Nasdaq,
- some nano- and micro-cap companies,
- and the following large tech stocks with quantum divisions:
- Amazon (AMZN)
- 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:
- Alphabet (GOOGL)
- 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:
- Microsoft (MSFT)
- 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:
- Baidu (BIDU)
- has developed a quantum computer with a 10-qubit processor
- and has developed a 36-qubit quantum chip.
- Read:
- IBM (IBM)
- 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:
- Alibaba Group (BABA)
- is investing heavily in quantum computing research
- and building a quantum computing chip based on superconducting qubit technology.
- Read:
- Honeywell International (HON)
- Honeywell Quantum Solutions and Cambridge Quantum have combined to form Quantinuum – the world’s largest integrated quantum computing company and offers the world's highest performing quantum computer and a full suite of quantum software, including the first and most advanced quantum operating system to support customer needs for improved computation in diverse areas including cyber security, drug discovery and delivery, material science, finance, and optimization across all major industrial markets.
- The company will also focus on the advancement of natural language processing to fully leverage the possibilities of quantum AI.
- Read:
- Tesla (TSLA)
- Tesla’s innovations in the field of AI is huge and has a cutting-edge AI team. Recently, Elon Musk claimed that Tesla is becoming known more as an AI and robotics company.
- Read:
- Adobe (ADBE)
- has launched Firefly - a collection of AI tools that enable users to generate content based on written or verbal prompts which, . when incorporated these into its existing creative software could fortify its economic defenses against competitors while simultaneously accelerating growth.
- Read:
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:
- the iShares Semiconductor ETF (SOXX), with 35 constituents and $0.35 in expenses which is UP 40.3% YTD, or
- the Invesco PHLX Semiconductor ETF (SOXQ) of 33 constituents and expenses of $0.19 which is UP 35.9% YTD)
To take full advantage of what the future might well hold for AI quantum computing and related companies consider investing in one or more of the stocks highlighted in this article. 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.
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Disclosure: None
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