Quantum computing stocks have emerged as one of the hottest investment topics of 2024: Defiance Quantum ETF(NASDAQ: QTUM) up 49.4% year-to-date, nearly doubling S&P 500:a steady 24.3% gain of .While the development of large-scale commercial quantum computers may take years, technological breakthroughs have sparked a rapid rush toward what many consider the next computing revolution.
Excitement is not just speculative hype. Quantum computing In 2024, we hit two milestones that suggest we are approaching a technological tipping point.
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The alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL) made history with its Willow quantum computing system, which demonstrated the ability to reduce errors as the number of qubits grows exponentially. This discovery solves a challenge that has puzzled researchers for nearly 30 years. More impressively, Willow completed the benchmark calculation in less than a minute, which would take today’s fastest supercomputers 10 septillion years, a period, which is much older than the age of the universe.
Meanwhile, quantum computing startup Infleqtion is in the works Nvidia:(NASDAQ: NVDA)achieved another first by demonstrating a practical application of materials science using logical qubits.This advance, which increased computational accuracy by a factor of 6, hints at the potential of quantum computing to revolutionize everything. battery technology superconductors.
While quantum computing remains in its infancy, these early discoveries, promoted by tech giants Alphabet and Nvidia, suggest we may be at the dawn of a computing revolution. Two companies are pushing this transformative technology that could supercharge your portfolio 2025 and beyond.
Leader in trapped-ion quantum computing IonQ:(NYSE: IONQ) emerged as one of the standout quantum computing stocks of 2024. The company’s new approach uses ionized atoms as the basis of its quantum systems, enabling longer and more complex calculations with fewer errors than competing approaches. IonQ’s platform integrates with all major cloud providers and supports multiple programming languages, making quantum computing very accessible to developers and researchers.
The company’s competitive advantages come from deep academic roots in ion trap technology, spanning more than 25 years of research and proven commercial traction through government and enterprise collaborations.IonQ has also expanded into quantum networks, working at the intersection of quantum computing and the future quantum internet.
However, despite IonQ’s impressive 258.5% share growth in 2024, the company remains unprofitable and faces significant technological and commercialization risks and competition from other quantum start-ups and the potential for technology obsolescence represent key challenges to IonQ’s market position the risks.
While IonQ’s valuation may seem steep after its stellar 2024 run, with shares trading at nearly 250 times sales, the company’s growing trading momentum, expanding quantum networking business and polarizing $382.8 million balance sheet at the end of the most recent quarter in a position to capture a significant part of what could become a multi-trillion dollar quantum computing market; For investors with a high risk tolerance and a long-term horizon, IonQ offers pure-play exposure to one of the most promising frontiers in technology.
A pioneer in quantum computing Abandons the calculation(NASDAQ: RGTI) Taking a fundamentally different approach to quantum computing than IonQ, using superconducting circuits instead of trapped ions, the company’s vertically integrated strategy includes Fab-1, the industry’s first dedicated quantum foundry, which gives Rigetti control over the entire quantum chip development process. This in-house manufacturing capability allows for rapid innovation cycles and protection against supply chain risks.
The company’s latest Ankaa quantum processor architecture achieved 98% two-qubit gate fidelity, marking a significant advance in quantum performance.Rigetti’s strategy focuses heavily on scalability through modular chip designs that allow larger quantum systems to be built from smaller, identical components. : The company has also established strong partnerships in the government, research and commercial sectors.
However, like other quants, Rigetti faces major technology hurdles and remains unprofitable.The stock’s 851.2% growth in 2024 and 130x sales valuation suggest that investors are pricing in significant future growth potential with a manufacturing approach, improved quantum performance indicators and a clear technology roadmap until 2025, Rigetti offers an intriguing pure play option for investors seeking exposure to superconducting quantum computing technology.
While tech giants like Alphabet and Nvidia have made significant strides in quantum computing, their huge market capitalizations mean quantum advances are likely to have minimal impact on their stock prices.Pure-play quantum companies like IonQ and Rigetti offer a more direct exposure to the technology’s potential, albeit at a significantly higher risk.Each represents a different technological approach: trapped ions vs. superconducting circuits, and both could emerge as winners in what could become the new mass computing market.
Given the early stage and technical complexity of quantum computing, however, many investors may prefer a more diversified approach. The Defiance Quantum ETF offers just that, balancing pure-play quantum stocks with technology leaders as quantum computing potentially approaches At the tipping point, investors now have multiple ways to position themselves in what could be one of the most transformative technologies of our time.
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Susan Frey, CEO of Alphabet, is a member of The Motley Fool’s board of directors. George Budwell has positions in IonQ and Nvidia The Motley Fool has positions in and recommends Alphabet and Nvidia has a disclosure policy.
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