Our 3 Top Quantum Computing Stock Picks for 2023

Stocks to buy

These quantum computing stock picks for 2023 are exciting because quantum computing itself promises to increase computation rates drastically. Without getting deep into the science, it must be understood that quantum computing could unleash new supercomputing powers. Current computers rely on bits that can only store information as a 0 or a 1 at any given time. Quantum computing, on the other hand, relies on qubits that can take multiple values at once. The result is that computational power rises exponentially.

Thus, investors are keen to find companies developing the technology because of the vast potential. And with quantum computer commercialization potentially happening in 2023, investors are scrambling to understand more.

It seems less a matter of if quantum computing will be commercialized than when at this point. So, with an expected compound annual growth rate of 31.2% between 2022 and 2029, investor capital is sure to pour into the sector. Thus, these three quantum computing stock picks for 2023 should be considered:

Ticker Company Price
QUBT Quantum Computing $1.66
MSFT Microsoft $257.22
IBM IBM $149.86

Quantum Computing (QUBT) 

Source: Shutterstock

At the very least, Quantum Computing (NASDAQ:QUBT) stock is interesting for the fact that it is increasingly marketing itself to investors. On Dec. 6, Quantum Computing filed an at-the-market-issuance-sales agreement worth up to $25 million. That means the company can sell up to $25 million worth of stock at market prices but isn’t required to sell any at all.

That capital, if exercised, could prove helpful for the company, which recorded a mere $134,000 in revenues through the first none months of 2022. That led to a net loss of $19.8 million during the same period.

The kicker here is that Quantum Computing moved from a pre-revenue firm to a revenue-generating firm in 2022. So, that $25 million in potential at-the-market-issuance sales may be a signal that the company is ready to scale up operations. The company develops hardware platforms as well as ready-to-run software for complex computations. Its Qatalyst software and QPS software are accessible to commercial users who lack knowledge of quantum computing. 2023 could be the year that sales accelerate quickly, making QUBT stock one to watch.

Microsoft (MSFT)

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There are many reasons to invest in Microsoft (NASDAQ:MSFT) stock right now. Analysts love it at the most superficial level, and there’s a substantial upside based on current prices.

Dig a bit deeper, and you quickly realize why Microsoft is so well regarded: Even in a muted environment for tech stocks, Microsoft continues to perform very well on a fundamental basis. In the most recent quarter, revenues grew 11%, surpassing the $50 billion threshold in the quarter. Net income, along with other metrics, suffered. But overall, Microsoft remains one of the best-run firms in the world, and that is reflected on Wall Street.

Microsoft’s Azure cloud products and services are a substantial contributor to its success and also where the conversation around quantum computing begins for the company. First of all, investors who don’t much care for quantum computing will be interested to know intelligent cloud revenues increased by 20%, reaching $20.3 billion in the most recent quarter.

Azure includes Microsoft’s answer to quantum computing, Azure Quantum. It is a full-stack open quantum cloud computing ecosystem. The firm is targeting researchers, businesses(1), and developers with the product and service. The stable nature of the firm, combined with its ability to commercialize, likely means that Azure Quantum can carve out a substantial piece of the market in the coming decade.

IBM (IBM)

Source: shutterstock.com/LCV

IBM (NYSE:IBM) is another big-name stock investors should consider in relation to quantum computing in 2023. The firm’s shares are already fully sold, meaning its current price is greater than its target stock price.

So, it might make sense to wait for those prices to fall before immediately buying, as prices are still high following better-than-expected Q3 results.

In any case, IBM remains one of the biggest names in quantum computing. The company qualifies itself as leading the world in quantum computing. In short, IBM boasts more than 20 of the most powerful quantum systems in the world and a network of the most powerful firms, academic institutions, national labs, and startups in the field.

IBM’s Quantum System One is the first integrated quantum system designed for commercial use. And, according to the firm, next year could mark a seminal point for commercialization efforts: “We also declared 2023 as a major inflection point: we’re ready to begin realizing the quantum-centric supercomputer, a modular computing architecture which enables scaling, combining quantum communication and computation to increase computational capacity, while employing hybrid cloud middleware to seamlessly integrate quantum and classical workflows.”

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks.Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

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