Experts believe that quantum computing stocks will be more difficult to duplicate in 2025.
Pure-play names such as IonQ Inc. (NYSE: IONQ), Rigetti Computing Inc. (NASDAQ: RGTI), and D-Wave Quantum Inc. (NYSE: QBTS), have seen their stock price increase more than tenfold in the last 12 months.
Analysts recommend that investors profit from these names as they are unlikely have a strong 2025.
Why did the quantum computing stock soar in 2024
Google’s quantum computing breakthrough has been a major factor in the recent strength of stocks in quantum computing.
This month, the tech giant introduced a quantum chip that it calls Willow. It can “reduce error exponentially as we scale using more qubits.”
Paul Meeks, of Harvest Portfolio Management, is still unimpressed. It’s too early to predict the future of these companies.
“Any evidence that has an impact on financials is a long way off in the future. What will they use it for, and is it a money-maker? In a recent interview, he said that this would determine the results and the valuation.
It’s still too early to predict the quantum computing winners
Paul Meeks attributes the 65% gain year-to date in the Defiance quantum ETF to investors wanting to take an early position in next big technology trend.
He does not think it is a good investment for the next year, as the whole debate about quantum computing has been going on for a while.
Talks of quantum computing in corporations began as early as a decade before.
Meeks agreed with the idea that quantum computing might one day be used to power large data centres. He noted that this “day” is still years, if no decades, away.
Greg Bassuk, the chief executive officer of AXS Investments, also does not expect significant breakthroughs in quantum computer in 2025.
How can you invest in quantum computing technology?
Ted Mortonson, a Baird strategist, also sees pure-play quantum stocks as being in a “speculation overexuberance” stage.
In a recent report, he advised clients that investing in mega-cap technology companies is a better way to bet quantum computing.
When you have a huge investment cycle in next-generation technology, you need to invest in companies with a massive free cash flow or monopoly status.
Alphabet Inc., the parent company of Google (NASDAQ: GOOGL), falls into this category. It is working on a quantum chip and offers exposure to artificial intelligence as well as a high-margin ad business.
Google stock is up by 50% from its lowest point of the year at this writing.
This tech giant’s shares pay a dividend of 0.41%, which makes them even more attractive to own over the long-term.
The post What is next for quantum computing stocks by 2025? The post What’s next for quantum computing stocks in 2025? may be updated as new information unfolds
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