Everyone would love to find the next Nvidia (NASDAQ: NVDA), the type of stock that generates life-changing returns. The problem is, that’s far from easy, and aiming for gains that are in the thousands of percentage points can often mean trying to get in early. Doing so involves taking on considerable risk.
One area investors have been piling money into aggressively over the past year has been stocks involved with quantum computing. Amid a flurry of spending on artificial intelligence and the need for more advanced computing capabilities, many stocks related to quantum computing have been taking off. Here’s a look at some of the hottest stocks in this area of tech, and whether one of them has the potential to be the next Nvidia.
Shares of Rigetti Computing, D-Wave Quantum, and Quantum Computing are all up staggering amounts in the past six months. While Nvidia has been falling, these stocks have been skyrocketing.
Rigetti doesn’t have “quantum” in its name, but it’s involved in building quantum computing systems. The key thing about quantum computing is that it can speed up processing times drastically and lead to faster solutions, thus significantly enhancing the capabilities not just for tech, but many other industries as well. The potential is enormous, but the market is still in its infancy.
According to analysts at Grand View Research, the quantum computing market probably will expand at a compound annual growth rate of more than 20% until 2030. Even by then, it will still be worth just over $4.2 billion.
What investors may find appealing about these stocks is that with so much potential still out there, their valuations may appear modest. Rigetti is the most valuable of the stocks listed here, but its market cap sits at around $2.7 billion. Nvidia, by comparison, is worth $2.8 trillion.
These stocks have been scorching-hot buys over the past several months, but none of them are profitable. These companies are still in their early growth stages, and it may be years before they hit breakeven, assuming they will at all.
Some analysts believe that quantum computers that can solve real-world problems may be just five years away. But others believe it could take much longer. The big concern for investors is whether these companies will still be around by then. Regardless of whether they have “quantum” in their names or how optimistic they may be about the future, investors should tread carefully with these types of high-risk investments.
