3 Top Quantum Computing Stocks to Buy in September - The Motley Fool

Quantum computing may be lurking in the shadow of artificial intelligence (AI), but investors should pay special attention to this field. It has the potential to reshape the computing landscape, and several strong players in this industry could benefit immensely from the rise of quantum computing. Three that I think are primed to benefit are Alphabet (GOOG -0.83%) (GOOGL -0.86%), IonQ (IONQ +1.09%), and Nvidia (NVDA +0.66%). These are top stocks in this industry, and the time is now to take advantage of them. Image source: Getty Images. Why is quantum computing a big deal? Quantum computing is different from traditional computing because it doesn't take a binary path. Traditional computing uses ones and zeros (called bits) to determine outcomes, while quantum computing uses qubits, which are better described as the probability of an answer being a zero or a one. This allows such machines to consider an endless number of possibilities, making it ideal for nonlinear problems, which include a surprising number of issues. In some situations, quantum computers will be able to complete calculations that would take digital supercomputers billions of years to handle. The systems aren't powerful enough yet, but that's just a matter of time. Ask again in five or 10 years. Tasks like processing AI, optimizing logistics and delivery networks, and weather prediction are just some of the opportunities that quantum computing could address. The market opportunity is vast, and a projection from the management consultancy McKinsey & Company estimates that the quantum industry could reach $72 billion in annual revenue by 2035. That's a huge chunk of revenue that's currently not in play, and these three stocks are primed to benefit from it. This trio is a balanced approach to quantum computing With how lucrative the technology is, it should come as no surprise that countless competitors are pursuing it. However, they tend to broadly break into two categories: legacy tech companies and upstarts. The legacy big-tech companies have vast resources to spend on this technology, and being able to produce a viable quantum computer could boost offerings like cloud computing. ExpandNASDAQ: GOOGLAlphabetPremium FeatureMoneyball Superscore92/100Today's Change(-0.86%) $-2.96Current Price$339.31Key Data PointsMarket Cap$4.2TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$337.09 - $343.5352wk Range$231.90 - $408.61Volume13.1MAvg Vol30.5MGross Margin60.94%Dividend Yield0.25% 1. Alphabet My top pick in this category is Alphabet because it has committed significant resources to the technology. The company is already delivering some breakthroughs. Its Willow quantum chip has produced impressive results, such as running its Quantum Echoes algorithm, which provides a verifiable advance over traditional computing hardware. Management says this is a sibling of the technology used for magnetic resonance imaging and could enable real-world applications in the near future. ExpandNYSE: IONQIonQPremium FeatureMoneyball Superscore62/100Today's Change(1.09%) $0.43Current Price$39.45Key Data PointsMarket Cap$16BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$38.83 - $39.7352wk Range$25.89 - $84.64Volume9.8MAvg Vol21.6MGross Margin-3317.96% 2. IonQ The upstart side is fairly crowded, and these companies are all-or-nothing bets on producing viable quantum hardware. They have often partnered with governments, companies, and universities to help fund their research and operations. Otherwise, they wouldn't be able to operate because they have no core business like the legacy tech players do to fund their research. My top pick in this segment is IonQ because of the unique path it is taking. Instead of choosing a superconducting approach, like most companies are, it's using an ion trap, which makes for more accuracy. It holds the world record for the most accurate quantum computer so far. With accuracy being one of the biggest hurdles quantum computing companies face, I think this makes IonQ a top pick in the quantum space. ExpandNASDAQ: NVDANvidiaPremium FeatureMoneyball Superscore94/100Today's Change(0.66%) $1.52Current Price$229.97Key Data PointsMarket Cap$5.5TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.Day's Range$229.82 - $234.7652wk Range$164.07 - $236.54Volume104.4MAvg Vol137.4MGross Margin74.67%Dividend Yield0.12% 3. Nvidia Last is Nvidia, which has already stated that it's not pursuing a quantum computer. Still, it is providing interface options so that such machines can plug into existing traditional computing networks for a hybrid approach. Nvidia has also launched various tools to support the new technology, ensuring that if quantum computing becomes a major part of the industry, this hybrid approach will likely use the company's hardware. That keeps Nvidia's current business intact, and with a huge AI demand boost, it's also a top AI stock pick.