Many investors are on the lookout for the next Nvidia, a stock known for delivering life-changing returns. However, achieving gains similar to those of Nvidia, which are in the thousands of percentage points, often requires entering the market early, accompanied by considerable risk.
Over the past year, investors have increasingly focused on stocks related to quantum computing. With substantial spending on artificial intelligence and the demand for more advanced computing capabilities, quantum computing stocks have seen significant growth. This report evaluates some of the most notable stocks in this technology sector and considers whether any have the potential to become the next Nvidia.
Several stocks, such as Rigetti Computing, D-Wave Quantum, and Quantum Computing, have experienced remarkable increases in their share prices over the past six months. While Nvidia’s value has decreased, these stocks have been on the rise. Rigetti, despite not having “quantum” in its name, is involved in building quantum computing systems. Quantum computing is anticipated to drastically reduce processing times and enhance capabilities across various industries. Although the potential is vast, the market remains in its early stages. Grand View Research predicts that the quantum computing market will grow at a compound annual growth rate of over 20% through 2030, reaching a value just above $4.2 billion.
The appeal of these stocks lies in their perceived potential and modest valuations. Rigetti, the most valuable among them, has a market capitalization of approximately $2.7 billion. In contrast, Nvidia’s market cap stands at $2.8 trillion.
However, investors should exercise caution with quantum computing stocks. While these stocks have gained significant attention recently, none of these companies are currently profitable. They are in the early stages of growth, and it may take years before they break even—if they do at all. Some analysts estimate that quantum computers capable of solving real-world problems could emerge in around five years, while others believe it may take longer. The primary concern for investors is whether these companies will endure the time required for quantum computing to become mainstream. Regardless of the optimism surrounding their potential, investing in such high-risk stocks demands careful consideration.
Declaring any of these stocks as the next Nvidia is premature. Quantum computing may represent the future of technology, but it does not guarantee Nvidia-level returns for investors involved in the sector. Although Nvidia’s value has soared over the past decade, it was already an established tech company at the time and did not carry the same risk as current quantum computing stocks.
Investors seeking exposure to quantum computing might consider investing in leading tech stocks that offer a balanced mix of risk and growth opportunities. Nvidia itself is investing in quantum computing. Betting heavily on stocks that might not survive until quantum computing becomes commonplace is risky and can result in significant losses. While gambling on the next big tech stock could yield substantial returns, it is more likely to lead to considerable losses. A safer strategy might be to invest in an established tech company like Nvidia or another firm poised to benefit from quantum computing in the future.
David Jagielski, the article’s author, has no positions in the mentioned stocks. The Motley Fool holds positions in and recommends Nvidia and adheres to a disclosure policy.
