These Major AI Quantum Computing Stocks Are Up 71%, On Average, YTD
Image Source: Unsplash
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 according to marketsandmarkets 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 appreciations to date reflect the success of their efforts.
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, their forward price-to-sales ratio, their price/earnings-to-growth ratio and how they have performed YTD, in descending order. Keep in mind that the data below changes daily as the stock prices change. All the stocks have market capitalizations in excess of $50B except IonQ @ $3.1B and are trading in excess of $50/share in USD except IonQ @$15.29.
- IonQ (IONQ): UP 343.2% YTD
- IONQ 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.
- Market Capitalization: $3B
- *Forward Price-to-Sales Ratio (PSR): 161.8 (extremely high)
- **Price/Earnings-to-Growth (PEG) Ratio: N/A (no earnings)
- *** Short Interest: 6.1%
- Read:
- Nvidia Corporation (NVDA): UP 213.1% YTD
- NVDA is the leading designer of graphics processing units required for powerful computer processing.
- Market Capitalization: $1.1T
- Forward Price-to-Sales Ratio: 21.0 (high)
- Price/Earnings-to-Growth Ratio: 1.3 (excellent)
- Short Interest: 1.1%
- Read:
- Advanced Micro Devices (AMD): UP 71.4% YTD
- AMD focuses on CPUs and GPUs and is a major player in the embedded chip market. In June it introduced a chip it calls "the world's most advanced accelerator for generative AI."
- Market Capitalization: $173B
- Forward Price-to-Sales Ratio: 7.6
- Price/Earnings-to-Growth Ratio: 1.3 (excellent)
- Short Interest: 1.9%
- Read:
- Splunk (SPLK): UP 70.4% YTD
- SPLK offers a unified security and observability platform that helps security leaders fortify their organization's digital resilience.
- Market Capitalization: $25B
- Forward Price-to-Sales Ratio: 6.3
- Price/Earnings-to-Growth Ratio: 1.4 (excellent)
- Short Interest: 3.3%
- Read:
- Marvell Technology (MRVL): UP 70.2% YTD
- MRVL is the semiconductor industry’s only data infrastructure specialist partnering with its customers and the open ecosystem to move, process, store and secure the world’s data architectures for the better.
- Market Capitalization: $47B
- Forward Price-to-Sales Ratio: 8.5
- Price/Earnings-to-Growth Ratio: 2.6
- Short Interest: 1.8%
- Read:
- Lam Research (LRCX): UP 55.9% YTD
- LRCX 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.
- Market Capitalization: $83B
- Forward Price-to-Sales Ratio: 5.7
- Price/Earnings-to-Growth Ratio: 4.7
- Short Interest: 2.0%
- Read:
- Broadcom (AVGO): UP 51.2% YTD
- 15% of its revenue is directly involved in booming generative AI applications such as 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.
- Market Capitalization: $349B
- Forward Price-to-Sales Ratio: 9.7 (high)
- Price/Earnings-to-Growth Ratio: 1.7 (excellent)
- Short Interest: 1.6%
- Read:
- Applied Materials (AMAT): UP 48.9% YTD
- AMAT is the world's largest supplier of semiconductor manufacturing equipment 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.
- Market Capitalization: $117B
- Forward Price-to-Sales Ratio: 4.5
- Price/Earnings-to-Growth Ratio: 2.2
- Short Interest: 2.4%
- Read:
- ONSemi (ON): UP 42.4% YTD
- ON provides intelligent sensing and power solutions that enable the electrification of the automotive industry, empowers fast-charging systems, and propels sustainable energy for the solar strings, industrial power, and storage systems.
- Market Capitalization: $39B
- Forward Price-to-Sales Ratio: 4.7
- Price/Earnings-to-Growth Ratio: 1.6 (very good)
- Short Interest: 6.1
- Read:
- Micron Technology (MU): UP 42.3% YTD
- MU began sampling its own HBM3 chips in July which are 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.
- Market Capitalization: $77B
- Forward Price-to-Sales Ratio: 3.7
- Price/Earnings-to-Growth Ratio: N/A (no earnings)
- Short Interest: 2.3%
- Read:
The above 10 quantum computing stocks are UP 70.6%, on average, YTD.
*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 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 to 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 a full suite of quantum software, including the first and most advanced quantum operating system, to support customer needs for improved computation. In addition, HON is also focused 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 are huge with a cutting-edge AI team. Recently, Elon Musk claimed that Tesla is becoming known more as an AI and robotics company than anything else.
- Read:
- Adobe (ADBE)
- has launched a collection of AI tools, called Firefly, that enable users to generate content based on written or verbal prompts which, when incorporated into their existing creative software could fortify Adobe's 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), which invests in stocks of 35 companies operating across information technology, semiconductors and semiconductor equipment sectors has expenses of $0.35 and is UP 38.0% YTD. or
- the Invesco PHLX Semiconductor ETF (SOXQ), which invests in stocks of 33 companies operating across information technology, semiconductors and semiconductor equipment sectors, has expenses of $0.19 and is UP 37.6% YTD.
Performance Comparisons
- The top 10 micro/small cap AI stocks are up 133.9%, on average, YTD;
- the magnificent 7 AI-themed mega-cap stocks are UP 81.7% YTD;
- the above 10 quantum computing stocks are UP 70.6%, on average, YTD;
- the top 10 AI chatbot development company stocks are UP 54.4%, on average, as of the end of September;
- the Global X Artificial Intelligence & Technology ETF (AIQ) consisting of 87 companies developing and utilizing AI technology in their products and services and providing hardware which facilitates the use of artificial intelligence for the analysis of data by big data companies and, collectively, in the information technology, software and services, software, system software, software research and artificial intelligence software sectors is UP 39.9% YTD; and
- the iShares Semiconductor ETF (SOXX) consisting of 35 companies operating across information technology, semiconductors and semiconductor equipment sectors. It is only UP 38.0% YTD or
- the Invesco PHLX Semiconductor ETF (SOXQ), which invests in stocks of 33 companies operating across information technology, semiconductors and semiconductor equipment sectors, is UP 37.6% 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.
More By This Author:
These 10 Micro/Small AI Stocks Are Up 134%, On Average, YTD
Conservative "Cannabis" Index Continued To Decline This Week
Major Psychedelic Drug Stocks Continued To Decline This Week
Disclosure: none
Visit munKNEE.com and register to receive our free Market Intelligence Report newsletter (sample more
Comments
