The nascent quantum computing industry has generated lots of investor interest. Pure-play quantum companies have seen soaring share prices, such as IonQ stock's more than 300% increase over the past year through Oct. 17.
But one tech giant is making breakthroughs, positioning it to be a leader in the quantum computing industry. That company is Microsoft (MSFT +0.00%). Here are some of the reasons why it's a top quantum computing stock to buy right now.
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Microsoft's quantum computing prowess
Microsoft's impressive accomplishments display its leadership in quantum computers. It's using topological qubits to tackle a major challenge with quantum machines: their susceptibility to calculation errors due to the unstable nature of the particles they use.
Topological qubits are inherently stable and less prone to mistakes. Other companies aren't copying this method because the tech only existed as a theory until Microsoft revealed the world's first quantum processor powered by topological qubits, the Majorana 1, earlier this year.
NASDAQ: MSFT
Key Data Points
The company is also collaborating with quantum computing companies. Its partnership with Atom Computing led to the unveiling of the first level two quantum device, which promises greater stability and accuracy than today's error-ridden level one quantum computers.
Microsoft can invest in cutting-edge technology thanks to its deep pockets. In its fiscal fourth quarter ended July 30, the tech conglomerate generated $25.6 billion in free cash flow, demonstrating its ample funds for developing quantum computers.
Lastly, Microsoft's share price valuation is far superior to pure-play quantum computing stocks. This can be seen by comparing its forward price-to-sales (P/S) ratio to IonQ's.
Data by YCharts.
The chart reveals that Microsoft's forward P/S multiple is a fraction of IonQ's, indicating Microsoft stock is the better value. With its substantial financial resources for innovation, success in quantum tech, and attractive share price valuation, Microsoft stands out as a top investment in the up-and-coming field of quantum computing.
