These Major AI Quantum Computing Stocks Are Up 71%, On Average, YTD

By Lorimer Wilson of munKNEE.com
Sunday, October 8, 2023 1:44 AM EDT

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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.

  1. IonQ (IONQ): UP 343.2% YTD
  2. Nvidia Corporation (NVDA): UP 213.1% YTD
  3. Advanced Micro Devices (AMD): UP 71.4% YTD
  4. Splunk (SPLK): UP 70.4% YTD
  5. Marvell Technology (MRVL): UP 70.2% YTD
  6. Lam Research (LRCX): UP 55.9% YTD
  7. Broadcom (AVGO): UP 51.2% YTD
  8. Applied Materials (AMAT): UP 48.9% YTD
  9. ONSemi (ON): UP 42.4% YTD
  10. Micron Technology (MU): UP 42.3% YTD

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:
  1. Amazon (AMZN)
  2. Alphabet (GOOGL)
  3. Microsoft (MSFT)
  4. Baidu (BIDU)
  5. IBM (IBM)
  6. Alibaba Group (BABA)
  7. Honeywell International (HON)
  8. Tesla (TSLA)
  9. Adobe (ADBE)

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.

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Disclosure: none

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