Bernstein says the future of tech is quantum. These two stocks have the most upside

Bernstein Highlights Two Quantum Tech Stocks Poised for Strong Investor Growth Potential

Imagine you’re at a science fair, and two kids have built completely different, amazing robots. It’s too early to say which robot will win the big prize, but both have cool features that could change how we all think about robots. That’s kind of what’s happening right now in quantum computing, and it’s why investors are paying attention.

Why Quantum Computing Matters for Investors

Quantum computers are like super-powered brains for certain problems, working alongside regular computers and graphics chips. Experts think these special machines could soon help solve problems traditional computers can’t, especially in fields like medicine, finance, and artificial intelligence.

For investors, this means a new sector could be forming, with the chance to buy into companies early—before it’s clear who will be the biggest winners.

Bull Case: Reasons to Be Excited

  • Early Movers: Two companies—Rigetti Computing and Infleqtion—are already standing out. Rigetti is focused on superconducting technology, while Infleqtion uses neutral atoms.
  • Undervalued Shares: Right now, the market prices suggest these companies are only expected to grab a tiny piece of the future quantum market (about 4% for Rigetti, 2% for Infleqtion). If they do better, their stocks could surge.
  • Strong Partnerships: Infleqtion is teaming up with Nvidia, a big name in AI chips, which gives them extra credibility and potential for growth in the AI space.
  • Financial Backing: Rigetti recently sold new tech to a university and has over $590 million in the bank, giving it room to keep growing and innovating.
  • Analyst Optimism: Some analysts predict Rigetti’s stock could rise nearly 60%, and Infleqtion’s could go up by as much as 51% from recent prices.

Bear Case: Reasons to Be Cautious

  • Uncertain Winners: The field is still young. Big players like IBM, Google, Microsoft, and Intel are also in the race. No one knows who will win, or if the market will be split between many companies.
  • Different Approaches: Quantum computers come in different “flavors,” and it’s not clear which type will work best for different problems. Some companies might do well short-term, while others could win big later.
  • Market Hype: Quantum computing has been called “the next big thing” for years. It’s easy to get swept up in excitement, but the technology is still developing, and profits may take time to show up.
  • Competition: Big tech companies have deep pockets and lots of talent. Startups like Rigetti and Infleqtion might get outpaced or bought out.
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What History Tells Us

When personal computers first came out, there were lots of brands—some disappeared, but others grew into giants. According to McKinsey & Company, the quantum computing market could reach $700 billion by 2035. But just like with early computers, it’s hard to know which companies will be the next Apple or Microsoft.

Investor Takeaway

  • Do Your Homework: Learn about the different kinds of quantum technology before investing. Each company has its own strengths and risks.
  • Spread Out Risk: Don’t put all your money into just one quantum stock. Consider a mix, or look for funds that include quantum tech.
  • Watch the Big Players: Keep an eye on how giants like IBM and Google are moving into quantum. Their progress could change the game.
  • Be Patient: Quantum computing is a long-term play. It might take years for winners to emerge and for profits to show up.
  • Stay Informed: Follow news about partnerships, new products, and analyst updates. The field is moving fast, and new information can change the outlook quickly.

For the full original report, see CNBC

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