Quantum computing has suddenly become a buzzword on Wall Street.
Ever since letter (Nasdaq: Google) (Nasdaq: Google) Quantum stocks have been soaring following reports that its new quantum chip, Willow, has reached new milestones. Willow is said to reduce errors exponentially as it scales, and it takes just five minutes to complete a standard benchmark calculation that would take one of the fastest supercomputers in the world today a billion years.
The announcement sparked a rally in Alphabet shares and led to gains in smaller pure-play quantum computing stocks, such as D wave quantum (NYSE: QBTS), Quantum computing (NASDAQ: QUBT), give up calculation (NASDAQ: RGTI)and IonQ (NYSE: IONQ) Soaring.
In January, however, those stocks plummeted amid pushback from several high-profile tech CEOs. first NVIDIA CEO Jensen Huang said "very useful" quantum computing is still 15 to 30 years away. Just a few days later, meta platform CEO Mark Zuckerberg echoed the comments, saying he believed it was "a long way from being a very useful example." He also believes that "fairly intelligent artificial intelligence" will emerge before quantum computing comes into play. Even an ex Cisco Systems Chief executive John Chambers said quantum computing was a further development in the "decade of artificial intelligence".
However, quantum stock leaders have jumped to the defense of the technology and their businesses.
Investors should be aware that quantum computing is still an emerging technology. Companies such as Quantum Computing, D-Wave Quantum and Rigetti Computing have almost no revenue. IonQ is the largest of the four quantum stocks, but its 2024 guidance projects revenue of just $38 million to $42 million, despite doubling revenue in the third quarter. The stock has a market capitalization of $9 billion and a price-to-sales ratio of over 200, indicating that investors are betting heavily on the stock.
The potential of quantum computing stocks is debatable, and so is its timetable for disruption, but between quantum and artificial intelligence, artificial intelligence is more worthy of your investment.
The technology already exists, is growing rapidly, and is disrupting numerous industries. Artificial intelligence stocks also have more room to run. Continue reading Here are two products worth buying today.
Micron Technology (NASDAQ:MU) It's best known as a supplier of memory chips, but now, like many of its peers, the company is seeing a surge in demand for artificial intelligence.
Revenue jumped 84% to $8.7 billion in the fiscal first quarter ended in November, but it was data center growth that really stood out, with revenue jumping more than 400% year over year and 40% year over year. Management later attributed this to strong demand for artificial intelligence.
Micron also has a close relationship with Nvidia, which is considered its largest customer, and Micron's stock price rebounded recently after Nvidia said it was using Micron chips in its new Blackwell platform.
Micron Technology also appears to be an attractive opportunity for investors at the moment, as the stock fell after its most recent earnings report on weak guidance. However, management said it will return to strong growth, which could pave the way for a sharp rise in the stock. At 14 times forward earnings, the stock looks cheap for its growth potential.
Another AI stock that looks like a must-have in 2025 is TSMC (NYSE:TSM)or TSMC.
TSMC is the world's largest contract chip manufacturer, serving Nvidia, apple, Broadcomand others. This gives TSMC huge market power, with a market share of more than 50% in third-party chip manufacturing and about 90% in advanced chip manufacturing. In many ways, it is key to the global economy.
In the fourth quarter, the company continued to expand its leadership in advanced chips, with 74% of its revenue now coming from advanced chips, which it believes are built on 7-nanometer or smaller processes.
TSMC’s revenue increased by 38% this quarter, and its operating profit margin was close to 50%.
As demand for artificial intelligence continues to grow and the chip industry recovers more broadly, TSMC looks set to have another strong year in 2025 and beyond.
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Randi Zuckerberg is the former director of market development and spokesperson for Facebook, the sister of Meta Platforms CEO Mark Zuckerberg, and a board member of The Motley Fool. Suzanne Frey is an Alphabet executive and a board member of The Motley Fool. Jeremy Bowman has worked at Broadcom, Meta Platforms, Micron Technology, Nvidia and TSMC. The Motley Fool owns and recommends Alphabet, Apple, Cisco Systems, Meta Platform, Nvidia and TSMC. "Motley Fool" recommends Broadcom. The Motley Fool has a disclosure policy.
Quantum Computing vs. Traditional Artificial Intelligence: Which Tech Stocks Are Must-Haves in 2025? Originally posted by The Motley Fool