Want to Invest in Quantum Computing? 3 Stocks That Are Great Buys Right Now.

Quantum computing could be the next frontier for computers and cloud-based services. While traditional computers still store data in binary bits of zeros and ones, quantum computers store zeros and ones simultaneously in qubits. That difference allows quantum computers to process much larger amounts of data than binary computers.

However, quantum computers are still much larger, pricier, and generate more errors than traditional computers. But from 2024 to 2032, the global quantum computing market could expand at a compound annual growth rate (CAGR) of 34.8%, according to Fortune Business Insights, as those technologies improve. If you want to profit from that secular trend, you should consider buying these three stocks: IonQ (NYSE: IONQ), D-Wave Quantum (NYSE: QBTS), and IBM (NYSE: IBM).

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IonQ

IonQ sells three tiers of quantum computers: its top-tier Aria system, its commercial Forte system, and its on-premise Forte Enterprise system. It plans to launch its fourth system, the Tempo, for its commercial and enterprise customers later this year. It also operates Harmony, a cloud-based platform for developing quantum applications.

IonQ expects to scale up its total quantum computing power, which it measures in algorithmic qubits (AQ), from 64 AQ this year to 1,024 AQ in 2028. It also expects its gate fidelity (error detection rate) to improve from 99.9% in 2024 to 99.95% in 2028.

It's also been developing a "trapped ion" technology to shrink the average width of a quantum computing unit (QPU) from a few feet to just a few inches. IonQ mainly sells its products and services to the U.S. Air Force Research Lab, other government agencies, and major universities.

In 2024, its revenue nearly doubled to $43.1 million, but its net loss more than doubled to $331.6 million. But by 2027, analysts expect its revenue to surge to $289.8 million as it narrows its net loss to $236.8 million. With a market cap of $6.2 billion, IonQ trades at 21 times the 2027 sales estimate. A lot of growth is baked into that frothy valuation, but its early mover's advantage and ambitious roadmap for the future could make it a top play on the nascent quantum computing market.

D-Wave Quantum

D-Wave Quantum develops quantum annealing tools, which help organizations optimize their schedules, workflows, supply chains, and logistics networks. It does that by processing large amounts of data through its systems to find the solutions which require the least computing power. It bundles together its own hardware and cloud-based services in its Leap platform, which can be integrated into larger public cloud infrastructure platforms.

It's also consistently upgrading its hardware. Its next-gen 4,400-qubit Advantage2 processor, which it successfully calibrated last November, can solve complex 3D lattice problems roughly 25,000 faster than its current-gen Advantage processor.

D-Wave already serves big clients like Deloitte, Mastercard, Lockheed Martin, and Accenture, and its focus on using quantum tools for more practical purposes could attract even more customers.

In 2024, D-Wave's revenue rose just 1% year over year to $8.8 million as its net loss widened from $82.7 million to $143.9 million. But by 2027, analysts expect its revenue to surge to $72.1 million as it narrows its annual net loss to $52.4 million.

With a market cap of $2.1 billion, D-Wave's stock isn't cheap at 29 times its 2027 sales estimate. But if you're looking for a long-term play on more practical applications for quantum computers, D-Wave might be a good speculative investment right now.

IBM

If IonQ and D-Wave seem too hot to handle, IBM might be a smart way to gain exposure to the quantum computing market without taking on too much risk. IBM deployed the world's first cloud-based quantum computing system in 2016, and it subsequently deployed more than 80 quantum systems which are used to run over 3 trillion programs daily.

IBM claims its fleet of 127+ qubit quantum computers is the "fastest in the world" with a "clear path to 100,000 qubits and beyond." IBM doesn't disclose its quantum revenue separately, but it provides its systems and services as extensions of its cloud-based ecosystem. Its customers mainly include universities and research institutions.

IBM's quantum business won't become its core growth engine anytime soon. For now, investors should pay attention to its hybrid cloud and AI businesses, which are driving its near-term growth and offsetting the slower growth of its legacy software and hardware businesses. Instead of going head-to-head against bigger cloud companies, IBM is expanding its open-source software subsidiary Red Hat to wedge more AI-driven hybrid cloud services between the public and private clouds.

From 2024 to 2027, analysts expect IBM's revenue and EPS to grow at a CAGR of 4% and 18%, respectively. It's still reasonably valued at 25 times next year's earnings estimate, pays a forward yield of 2.8%, and could be the least stressful way to profit from the long-term growth of the quantum, cloud, and AI markets in this turbulent market.

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Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Accenture Plc, International Business Machines, and Mastercard. The Motley Fool recommends Lockheed Martin. The Motley Fool has a disclosure policy.