Quantum computing has suddenly become a buzzword on Wall Street.
since The alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) reports that it has reached a new milestone with Willow, its new quantum chip. quantum stocks have risen. It said Willow could exponentially reduce errors as it grew, and it completed a standard benchmark calculation in just five minutes that would take one of the fastest supercomputers in the world today 10 septillion years.
The announcement sparked a rally in Alphabet stock and sent small-cap pure-play quantum computing stocks such as D-Wave Quantum (NYSE: QBTS), Quantum computing (NASDAQ: QUBT), Abandons the calculation (NASDAQ: RGTI)and: IonQ: (NYSE: IONQ) rising to the sky.
However, those stocks fell in January on the heels of several high-profile tech CEOs Nvidia: CEO Jensen Huang said “very useful” quantum computing is just 15 to 30 years away. Meta platforms CEO Mark Zuckerberg echoed those words, saying he thought it was “far from being a very useful paradigm.” He also believed that “pretty smart AIs” would be available before quantum computing became useful Cisco Systems CEO John Chambers said Quantum Computing is the way forward for the “AI Decade”.
However, quant leaders in stocks have jumped to defend the technology and their businesses.
Image source: Getty Images.
Investors should be aware that quantum computing is still an emerging technology.Companies such as Quantum Computing, D-Wave Quantum, and Rigetti Computing have almost no revenue.IonQ is the largest of the four quantum stocks, however 2024 guidance calls for revenue of just $38 million to $42 million, although revenue doubled in the third quarter.At a market cap of $9 billion, the stock is trading at a price-to-sales ratio over 200, indicating that investors are betting big on the stock.
The potential of quantum computing stocks is debatable, as is its disruptive timeline, but between quantum and AI, AI is more deserving of your investment dollars.
That technology is already here, developing rapidly and disrupting a wide range of industries. AI stocks have more room to operate, too. Read on to see which two are worth buying today.
Micro technology (NASDAQ:MU) Known as a supplier of memory chips, the company is seeing a surge in demand for artificial intelligence these days, like many of its peers.
Revenue rose 84% to $8.7 billion in its fiscal first quarter, which ended in November, but what really stood out was data center growth, where revenue rose more than 400% year over year and by 40%. sequentially, which management attributed to strong demand for AI.
Micron also has a close working relationship with Nvidia, which is said to be its biggest customer, and its shares recently rose after Nvidia said it was using its chips in its new Blackwell platform.
Micron is also an attractive opportunity for investors at the moment, as shares fell after its earnings report let in. However, management said it will return to strong growth, which could pave the way for significant gains in the stock At a forward P/E of 14, the stock looks cheap for its growth potential.
Another AI stock that looks like a must-have in 2025 TSMC: (NYSE: TSM)or Taiwanese semiconductor manufacturing.
TSMC is the world’s largest contract chipmaker, with the likes of Nvidia, Apple:, Broadcom:and others. That gives TSMC enormous market power, with market shares of over 50% in third-party chipmaking and roughly 90% of the leading edge.In many ways, it’s the backbone of the global economy.
In the fourth quarter, the company continued to push its lead in advanced chips, as 74% of its revenue now comes from advanced chips that it says are 7 nanometers or less.
TSMC’s revenue growth was 38% and its operating margin reached nearly 50% in the quarter.
As demand for AI continues to grow and a broader recovery in the chip sector begins, TSMC looks set to have another strong year in 2025 and beyond.
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Randi Zuckerberg, former CMO and Facebook spokesperson and sister of Meta Platforms CEO Mark Zuckerberg, serves on The Motley Fool’s board of directors. Susan Frey, CEO of Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has positions in Broadcom, Meta Platforms, Micron Technology, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Alphabet, Apple, Cisco Systems, Nvidia, and Taiwan Semiconductor Manufacturing gives Broadcom The Spotted Fool has a disclosure policy.
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