The era of quantum computing is upon us. Best described as a supercomputer, quantum computing technology is capable of processing vast amounts of data at speeds once thought unimaginable. The actions of the quantum computer have the potential to revolutionize industries ranging from healthcare and prescription drug development to space exploration and artificial intelligence.
Right now, the most powerful quantum computers are controlled by a handful of leading technology companies. However, most industry experts and analysts say it won’t be long before the rest of us experience the impact of quantum computing in our daily lives. According to some estimates, the quantum computing market is projected to reach $125 billion annually by 2030.
Others classify it as a $1 trillion industry. Where we ultimately end up with quantum computing remains to be seen. But there’s no question that the industry will be a major catalyst for tech stocks moving forward. Here are the three most undervalued quantum computer stocks to buy now: June 2023.
This Maryland-based company specializing in the production of hardware and software for quantum computing has had incredible success this year. So far in 2023, IonQ (NYSE:IONQ extension) gained 284%, outperforming nearly every other tech stock. While the year-to-date gains are impressive, they come after a sharp decline in IONQ shares. Founded in 2015 and still largely in start-up mode, IonQ’s share price is only 20% higher than its 2021 initial public offering price, and that’s after the big run over the past six months.
However, IONQ stock is moving in the right direction and still looks undervalued and there appears to be a trail ahead despite the quantum leap the share price has experienced. IonQ is also technically a small-cap stock as its market cap is currently just $2.66 billion. The recent gains in the share price are due to the growing hype around artificial intelligence, as well as improving financials and news of recently signed partnership agreements with the tech giants Microsoft (NASDAQ:MSFT extension) AND Amazonia (NASDAQ:AMZ extension).
While IonQ remains unprofitable, its revenue growth is accelerating and it has $525 million in cash to help sustain it until it hits profit.
Honeywell International (HON)
Honeywell International (NASDAQ:ON) is probably not the first name that comes to mind when thinking about quantum computing stocks. The industrial company that mainly focuses on aerospace products and building technologies, is not even thought of as a technology company. Yet Honeywell has a quantum computing division called “Honeywell Quantum Solutions” that develops and markets quantum computing technologies. The company said it is pushing quantum computing because it sees a $1 trillion opportunity in the industry over the next few decades.
Honeywell’s quantum division currently has 400 employees and operations worldwide, spanning Europe, Asia and the U.S. Honeywell has also struck a deal with the global banking giant HSBC extension (NYSE:HSBC extension) which will see the lender use Honeywell’s quantum computing power to analyze customer data. HON stock is down 4% on the year, has a relatively low price-to-earnings (P/E) ratio of 26 and pays a quarterly dividend of $1.03 per share, which is good for a yield of 2 %. While not a pure gaming tech stock, Honeywell is another way for investors to gain exposure to the rapidly growing quantum computing space.
Legacy tech giant and household name IBM (NYSE:IBM) is a global leader in quantum computing. In early June, the company published a study in the scientific journal Nature where its scientists said they have made a long-awaited breakthrough that makes quantum computers as practical as conventional ones and paves the way for the technology’s widespread adoption and use. According to IBM scientists, it probably won’t be long before we all use quantum computing power in our daily lives.
As has been the case for a long time, IBM stock continues to underperform the market. So far in 2023, IBM’s stock price is down 6%, while the benchmark Nasdaq index is up 30%. The poor performance can be attributed to a years-long turnaround plan to reposition the company largely as a cloud computing company. However, IBM remains focused on creating supercomputers through its quantum computing division. And the stock pays a generous dividend yielding nearly 5%, which is good for a quarterly payout of $1.66 per share.
As of publication date, Joel Baglole held a long position in MSFT. The views expressed in this article are those of the writer, subject to InvestorPlace.com Guidelines for publication.
#Top #Underrated #Quantum #Computing #Stocks #Buy #June
Image Source : investorplace.com