Although not nearly as big or well-known as artificial intelligence, a small group of quantum computing stocks has taken the stock market by storm and enriched investors who were able to spot their potential just a year or two ago.
Quantum computers are the next innovation in computing. While the foundation of computers is bits, the most basic unit of information, quantum computers use qubits, which can process data with more complexity and therefore solve much more complex calculations in a much more efficient manner.
According to Google's quantum team, quantum computers have the potential to help create more effective drug treatments and the ability to provide key insights that could be used to identify and develop new sources of clean energy.
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One company that has benefited from the quantum trade is Rigetti Computing (RGTI 0.13%). In July, the company announced that its 36-qubit system had achieved 99.5% median two-qubit gate fidelity, which is a measure of accuracy. Rigetti also hopes to achieve the same accuracy with its 100-plus-qubit system before year's end -- more qubits means a more powerful system.
If you'd invested $1,500 last year
If quantum computers can be commercialized and do what researchers believe is possible, then the sector has the same kind of unlimited potential as AI. The AI trade likely opened investors' eyes, which is why some quantum stocks like Rigetti have been over 20-baggers in the past year.
As of this writing on September 16, if you'd invested $1,500 one year ago, you'd have a whopping $36,500 today! Returns over the past year have been phenomenal, but keep in mind that Rigetti is still losing money, generates very little revenue, and now trades at a nearly $6.5 billion market cap anyway. Investors should understand that Rigetti is a very risky investment. The commercialization of quantum computing could still be far away, and it's hard to know just how advanced these machines will actually be.
