Below we presented the list of 5 Best Quantum Computing Stocks to Buy Now. For our detailed discussion and a more comprehensive list please see 11 Best Quantum Computing Stocks to Buy Now.
5. Nvidia Corporation (NASDAQ:NVDA)
No of HFs: 82
Total Value of HF Holdings: $7.67 Billion
The 5th best quantum computing stock to buy now is NVDA. The top hedge fund holder of this stock is Anna Nikolayevsky’s Axel Capital Management which had $2 million invested in the stock at the end of December. An insider purchased 100 shares at around $537 in December 2020. The stock remained the same since then. In an article, Vulcan Value Partners mentioned that NVIDIA’s value grew substantially while they owned it, and they continued to follow their discipline by trimming and adding to the company as its price fluctuated
“NVIDIA Corp. is the dominant supplier of Graphics Processing Units (GPUs) worldwide. During the first quarter of 2019, its stock price declined considerably due to the combination of three factors. A capital spending hiatus by cloud providers, the collapse in demand for cryptocurrency mining, along with the end of the product cycle in its most recent gaming chip caused NVIDIA to miss its quarterly earnings estimates. As a result, we were given the opportunity to purchase NVIDIA with a significant margin of safety in March of 2019. NVIDIA’s value grew substantially while we owned it, and we continued to follow our discipline by trimming and adding to the company as its price fluctuated. We exited NVIDIA when its stock price rose close to our estimate of fair value. The combination of its value growth and the closing of the price to value gap provided substantial returns over our investment period.”
4. Qualcomm, Inc. (NASDAQ:QCOM)
No of HFs: 87
Total Value of HF Holdings: $2.58 Billion
The top hedge fund holder of this stock is Paul Cantor, Joseph Weiss and Will Wurm’s Beech Hill Partners’ which had $5 million invested in the stock at the end of December. An insider purchased 500 shares at around $84 in December 2019. The stock is up 92% since then. The stock was mentioned as one of the 30 Most Popular Stocks Among Hedge Funds: 2020 Q3 Rankings. In an article, Del Principe O’Brien Financial Advisors mentioned QCOM.
“When Qualcomm was trading in the low $50s, we bought every share we could. Qualcomm stock rose to around $70 when Broadcom was set to acquire the company, but ultimately the deal did not go through. In April of this year, Qualcomm ended a lengthy and complicated legal battle with Apple over the licensing of Qualcomm’s chip technology in Apple’s mobile devices, including its iPhones. The settlement included a payout from Apple to Qualcomm rumored to be around $6 billion, as well as a six-year licensing agreement and a supply agreement guaranteeing that the chipmaker continue to provide its products to the largest company in the world. With this settlement and the expected increase in product shipments, Qualcomm anticipates an incremental earnings per share of $2. As Qualcomm shareholders, we were able to realize a gain of 54% over a short period of time.”
3. Alphabet Inc. (NASDAQ:GOOG)
No of HFs: 162
Total Value of HF Holdings: $14.7 Billion
GOOG ranks as the 3rd best quantum computing stock to buy now. Avory & Co mentioned GOOG in their Q4 2020 investor letter.
“Alphabet (Google) was another purchase in mid-March as the pandemic crushed ad budgets. The company reorganized and leaned into its productivity suite to capture a meaningful share of the collaboration market. The quick pivot to product expansion and user-interface modifications allowed Google to end the year with 4 of the top 9 most downloaded productivity apps. 2020 brought the investment focus back to the quality of management, given that it was the CEOs and their executive teams decisions and execution, that proved to be the most critical part of any business during the year. The current and future outcomes of many of this business will be directly related to the decisions management made in the roughly 60 days of March and April.”
2. Alibaba Group Holding, Limited (NYSE:BABA)
No of HFs: 166
Total Value of HF Holdings: $28.8 Billion
BABA was mentioned as one of the 10 Best Chinese Stocks to Buy Now. In an article, Baron Opportunity Fund mentioned BABA.
“Alibaba Group Holdings Limited is the largest retailer and e-commerce company in China. Alibaba operates shopping platforms Taobao and Tmall and owns 33% of soon-to-be publicly traded Ant Financial, which operates Alipay, China’s largest third-party online payment provider. Shares of Alibaba were up on sustained core commerce recovery benefiting from improved purchase frequency and spending per order. We believe Alibaba’s core business remains highly profitable, complemented by rapid growth in the cloud business and inflection in the Cainiao logistics and New Retail segments.”
1. Microsoft Corporation (NASDAQ:MSFT)
No of HFs: 234
Total Value of HF Holdings: $42.1 Billion
The top quantum computing stock to buy now is MSFT. The top hedge fund holder of this stock is Stephen J. Errico’s Locust Wood Capital Advisers’ which had $51 million invested in the stock at the end of December. MSFT was mentioned as one of the 10 Best Software Stocks to Buy Now. RiverPark Advisors mentioned in their Q2 2019 investor letter that MSFT remains a top five position.
“Microsoft: Microsoft shares were our next top contributor driven by the company’s solid fiscal third quarter results, as well as the strong rebound in technology shares during the month (especially for those firms, like MSFT, that are not currently targets of antitrust investigations ). For its fiscal third quarter (ending March), MSFT’s Commercial Cloud revenue grew 41% yearover-year to $10 billion, generating more than 30% of Microsoft’s total revenue. The company’s two other segments, Productivity and Business Processes and More Personal Computing, grew a combined 14% as overall company revenue grew 16% and Non-GAAP EPS grew 20%.
Microsoft has, we believe, entered a second chapter of market-leading growth that will drive the company’s revenue and profits for years to come. Microsoft’s Cloud Infrastructure offering is in the fastest growing segment of the cloud services market (including software-as-a-service (SaaS)), a market that is characterized by recurring revenues, strong pricing, high levels of customer engagement and high margins. The overall Infrastructure-as-a-Service (IaaS) industry is growing more than 30% per year and is forecast to reach $100 billion of revenues by 2021. We believe that cloud-based services can become the company’s largest revenue and earnings producer and expect Microsoft to generate significant and growing free cash flow ($11 billion last quarter, up 19% year-over-year). The company should deliver at least mid-to-high teens EPS growth, with upside from deploying its $134 billion cash balance ($7 billion was returned to shareholders in the quarter through dividends and share buybacks). We trimmed our position on strength, and Microsoft remains a top five position in in the Fund.”
Please also see 10 Best Artificial Intelligence Stocks To Buy Now and 15 Best Blue Chip Stocks to Buy Now.
By the way, you might have noticed that IBM didn’t make our list of the best quantum computing stocks to buy now because hedge funds are quite bearish on IBM’s other businesses. Short seller Jim Chanos publicly bashed the stock recently. We believe IBM definitely deserves a closer look because if hedge funds are wrong about it and its investments in emerging technologies start to pay off, IBM can return 10x over the next 10 years.
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Disclosure: None.
