Move over, AI. There’s another fast-moving technology that’s expected to generate massive financial gains in the second half of the 2020s. Quantum computing’s reputation is growing as a tech marvel that’s expected, like artificial intelligence, to change how every sector does business, from finance to energy to health care.
A case in point: Quantum Insider reported that the technology could make a $1 trillion economic impact over the next 10 years. Quantum computing firms are expected to stack $50 billion in revenues while creating 840,000 jobs by 2035.
[Sign up for stock news with our Invested newsletter.]
That all spells an opportunity for market watchers who feel they may have missed the boat on AI and cryptocurrencies. With quantum technologies shifting into higher gear as the calendar flips to 2025, which stocks hold the most promise? These eight companies could be well positioned to dominate when quantum computing goes mainstream:
| Quantum Computing Stock | YTD Return as of Dec. 10 | Forward Dividend Yield |
| Alphabet Inc. (ticker: GOOG, GOOGL) | 33.0% | 0.43% |
| Honeywell International Inc. (HON) | 11.3% | 1.97% |
| Microsoft Corp. (MSFT) | 18.7% | 0.75% |
| FormFactor Inc. (FORM) | 0.7% | N/A |
| IonQ Inc. (IONQ) | 166.1% | N/A |
| International Business Machines Corp. (IBM) | 45.8% | 2.90% |
| Nvidia Corp. (NVDA) | 172.8% | 0.03% |
| Rigetti Computing Inc. (RGTI) | 559.0% | N/A |
This technology powerhouse made headlines this week with a new quantum computing processor, called Willow, which exponentially reduces the error rate inhibiting quantum computing’s growth and “paves the way to a useful, large-scale quantum computer,” as Google stated in a recent product note.
Willow is so powerful that in a matter of minutes, the quantum technology can complete a computation that would take the speediest classical computer 10 septillion years to generate, according to Google. As the company dramatically points out, that is a number that “vastly exceeds the age of the universe.” Alphabet, Google’s parent company, already has a $2.4 trillion market cap and has returned 24.7% in the past three months as of Dec. 10.
Given the big breakthrough in the quantum field announced this week, expect interest to percolate in GOOGL shares, which gained more than 5% on the day of the Willow announcement.
Honeywell International Inc. (HON)
Honeywell shares are on the rebound in late 2024, earning 14.6% in the past three months after a lackluster first half of 2024. The Charlotte, North Carolina-based multi-industry firm also offers a tidy 2% dividend yield. Analysts have taken note, and Citi hiked its one-year target price from $244 to $268 per share. The stock is currently trading at about $229 per share.
On the quantum computing front, Honeywell has yet to move forward on an initial public offering for its Quantinuum quantum computing unit, which the company launched in a partnership with Cambridge Quantum in 2021. In late July, Honeywell reportedly met with several investment banks over a proposed IPO valued at $10 billion. In the meantime, Quantinuum is poised to roll out its first product, a cybersecurity offering that, as Honeywell puts it, “cannot be done using classical computers and thus (is) the first genuine quantum product for use in the real world.”
Microsoft Corp. (MSFT)
Trading at about $449 per share, MSFT stock is up 18.7% year to date, with a 0.75% dividend yield. The company shook off a recent U.S. government probe into its cloud computing business, with its share price up 4% in November and up 7.2% over the past three months. The software titan sports an impressive balance sheet, with both operating and gross margins expanding over the past five years.
Microsoft is wagering that its seeds planted in the quantum computing market will bump those numbers up even higher. In November, Microsoft announced a deal with Atom Computing to create a powerful new quantum supercomputer with 1,000 physical qubits, with a 2025 rollout in the works. The new computing partnership with Atom should help Microsoft get its powerhouse quantum technologies out of the laboratory and into the commercial marketplace faster than expected.
Earlier this year, Microsoft announced that its cloud platform, Azure, which offers quantum capabilities for research in areas such as environmental science, agriculture, health, energy, climate and materials, will be gaining new priority access to reliable quantum computing hardware via Azure Quantum. The company says that the move should aid researchers in disciplines such as chemical, physical and life sciences by addressing computing speed issues that have long hampered research and development.
FormFactor Inc. (FORM)
This Livermore, California-based technology test and measurement solutions service provider is finally on the plus side of the share-price ledger, with its stock up 0.7% year to date after a three-month lull. A consensus estimate from six Wall Street analysts on TipRanks pegs the company’s one-year price target at $53. That represents an upside of 26.2% from its Dec. 10 closing price of $42 per share.
Still, that figure is significantly lower than the earlier $62 price target set by Craig-Hallum’s Christian Schwab and a $64 price target set by B. Riley Securities in the fall, signaling a modest loss of faith in the company’s near-term share performance.
Yet FormFactor believes it has a winner in its PQ500 probe socket, which pinpoints cryogenic temperatures used in developing quantum chips. “By eliminating the need for wire bonding, this reusable probe socket simplifies the testing of quantum chips, providing high-frequency signal transmission up to 20 GHz in cryogenic environments,” the company states on its website. “With the PQ500, researchers can achieve high-integrity, low-complexity measurements, essential for advancing quantum computing technology.”
Maintaining the low temperatures required for the components to function properly in cryogenic systems is a major challenge in commercializing quantum computers. FormFactor’s line of refrigerators is designed to support the low temperatures needed for research.
IonQ Inc. (IONQ)
IonQ has been a portfolio blockbuster in 2024. In the past three months, the company’s stock price is up a staggering 377.8%, and it has gained 166.1% year to date as of Dec. 10. On Nov. 7, the Maryland-based quantum computing company saw its stock price rise by 19% the day after it landed quantum networking company Qubitekk, which is credited with developing the first U.S. commercial quantum network.
Simultaneously, IonQ announced a partnership with biotech giant AstraZeneca PLC (AZN) to produce quantum computing applications that would help the company accelerate drug discovery. In late September, IonQ announced a $54.5 million quantum systems contract with the U.S. Air Force Research Laboratory and between $75 million and $95 million in expected quantum computing development contracts by the end of 2024. The company has partnerships with SoftBank Investment Advisers and the University of Maryland to expand its work in quantum computing development. It also works with major cloud platforms like Microsoft’s Azure and Amazon Web Services.
The company also announced that third-quarter 2024 revenue stood at $12.4 million, up 102% on a year-to-year basis. With momentum on its side, ample cash reserves and some heavy hitters in its corner, IonQ is rolling strong into 2025, and shareholders may want to roll with it.
International Business Machines Corp. (IBM)
With its stock up 45.8% in 2024 and a robust 2.9% dividend, IBM has a solid story to tell investors heading into the new year. Analysts are generally supportive of the stock, with Evercore ISI sticking to its “buy” call, albeit with limited upside on its $240 price target. (IBM shares are currently trading at about $232 per share.)
In mid-November, IBM announced that its Quantum Heron processor is running faster than ever. “Leveraging Qiskit, IBM Heron, the company’s most performant quantum processor to date and available in IBM’s global quantum data centers, users can now accurately run certain quantum circuits with up to 5,000 two-qubit gate operations,” IBM stated in a product release. “Users can now leverage its capabilities to expand explorations in how quantum computers can tackle scientific problems across materials, chemistry, life sciences, high-energy physics and more.”
On Sept. 30, IBM also announced Big Blue’s newly expanded IBM Quantum Data Center expansion in Poughkeepsie, New York, which operates the highest number of available utility-scale quantum computers at a single location in the world, IBM says. Poughkeepsie is officially the global hub for IBM’s Quantum Network, which has expanded after a second IBM Quantum Data Center launched on Oct. 1 in Ehningen, Germany.
Nvidia Corp. (NVDA)
Nvidia continues to rock on in 2024, with its share price up 172.8% year to date, although growth has moderated in the past three months, slowing to 25%. That’s still a share-price appreciation rate shareholders can get behind, in a year when the S&P 500 is up 26.5% as of Dec. 10.
The company’s quantum computing efforts are moving quickly, too. On Nov. 18, Nvidia announced that it was working with Google Quantum AI to “accelerate the design of its next-generation quantum computing devices using simulations powered by the Nvidia CUDA-Q platform.” Nvidia notes that Google quantum computing engineers can now wield 1,024 Nvidia H100 Tensor Core GPUs at the Nvidia Eos supercomputer to perform some of the world’s largest and fastest dynamic simulations of quantum devices “at a fraction of the cost.”
Nvidia is also working with another major global brand, Amazon AWS, to integrate its CUDA-Q platform quantum computing technologies into Amazon Braket, both companies announced on Dec. 2.
Rigetti Computing Inc. (RGTI)
Berkeley, California-based Rigetti produces full-stack quantum computing services for global enterprise, government and research companies via its Rigetti Quantum Cloud Services platform. The company counts NASA, the U.S. Air Force Research Laboratory and HSBC Holdings PLC (HSBC) as part of its rapidly developing client list.
On Nov. 25, RGTI received a big boost to its bottom line when it announced the successful completion of a $100 million at-the-market equity offering. Company shares shot up 70%, to $2.95 per share, after the common-stock sale and have surged since, with RGTI at $6.50 per share as of the market close on Dec. 10. RGTI’s shares have exploded 784.7% in the past three months and 559% year to date.
More from U.S. News
8 of the Best Tech Dividend Stocks to Buy
7 Best Small-Cap Tech Stocks to Buy
8 Best Quantum Computing Stocks to Buy for 2025 originally appeared on usnews.com
Update 12/11/24: This story was previously published at an earlier date and has been updated with new information.
