The quantum computing space is full of companies that have millionaire-maker potential. The difficulty lies in sorting out ahead of time which ones are most likely to actually deliver on that potential. Developing this nascent technology remains a high-risk, high-potential-reward endeavor, and many companies pursuing it are likely to go bankrupt or be bought out before reaching a point where they can offer a commercially viable quantum computing product.
In my view, these two stocks could deliver incredible returns, but there is no guarantee that either will actually do so.
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1. IonQ
IonQ (IONQ +3.30%) is my top pick in this space, at least among the pure plays. Among the leading challenges in quantum computing right now are error reduction and error mitigation. The qubits that sit at the heart of all of these machines are incredibly sensitive, and that leads to an unacceptably high level of errors in their results. An inaccurate computing solution is basically worthless, so every company in the quantum computing space is looking to develop systems that will drastically reduce their error rates and allow them to correct those that do occur.
IonQ is the current leader on that front, and by a fairly meaningful margin. It gained this advantage due in part to the particular approach it's taking to quantum computing. While IonQ's trapped ion qubits have given it an accuracy advantage, the processing speeds of this type of system are slower than those of more widely pursued types of quantum computers. This could become a weakness in the future. But I think IonQ has a great chance of bringing a viable commercial product to market, which makes it one of my top choices among quantum computing stocks right now.
NYSE: IONQ
Key Data Points
2. D-Wave Quantum
D-Wave Quantum (QBTS +3.14%) is taking a different approach to quantum computing than most of its competitors. Instead of trying to develop a broad-purpose quantum computer, it has built its product around a technology called quantum annealing. Such machines are best suited for optimization problems, a category that happens to include some of the most natural use cases for quantum computers in general, including solving problems in generative artificial intelligence (AI), weather modeling, logistics networks, and statistics.
The niche approach may allow D-Wave to carve out a decent market opportunity for itself, as opposed to trying to compete with everyone else to make a general-purpose quantum computer. At the same time, even potential customers that have optimization problems to address may prefer the flexibility of a broad-use quantum computer. That could reduce D-Wave's prospects.
NYSE: QBTS
Key Data Points
Both of these companies have the potential to deliver monster returns if their quantum computing solutions end up being popular options. At the same time, there's a decent chance that either one or both won't make it to the finish line. Numerous well-funded competitors are vying for supremacy in this emerging technology field, and resource availability could be a defining issue in determining which ones can reach their goals.
If the prospect of a stock going to $0 scares you, but you're bullish on quantum computing, you may want to consider instead buying a quantum computing ETF that gives you exposure to nearly every publicly traded business in the space. Although the returns from that sort of a diversified investment won't be as good as investing in either IonQ or D-Wave would be if those companies' efforts pan out, they could still be high if useful quantum computing systems are developed and become a significant part of the world's computing infrastructure.
