In this article, we will take a look at the 5 biggest quantum computing companies in the world. If you want to see more companies in this selection, go to the 15 Biggest Quantum Computing Companies in the World.
5. Alibaba Group Holding Limited (NYSE:BABA)
Market Capitalization: $224.04 billion
2022 Total Revenue: $124.92 billion (¥864.54 billion)
Alibaba Group Holding Limited (NYSE:BABA) is an Hangzhou, China-based technology giant with exposure in e-commerce, artificial intelligence, and cloud computing. The Chinese multinational technology conglomerate has been investing heavily in quantum computing research, including building its quantum computing chip and establishing the Alibaba Quantum Laboratory. The division is focused on developing quantum computing technology for practical applications in areas like machine learning and cryptography. Alibaba Group Holding Limited (NYSE:BABA) has made major progress in launching its quantum computing chip, called the XuanTie C910, which is based on superconducting qubit technology.
Artisan Partners shared its outlook on Alibaba Group Holding Limited (NYSE:BABA) in its Q3 2022 investor letter. Here’s what the firm said:
“Alibaba Group Holding Limited (NYSE:BABA) declined 30% during the quarter primarily due to the continued impact of China’s zero-COVID policy. In August, more than 70 Chinese cities with 300 million combined population were in some state of lockdown. Unfortunately, this comes on top of the other regulatory and competitive challenges that had previously been pressuring Alibaba’s shares over the past year. The painful decline in the share price has made Alibaba a poor investment so far—for good reason. In the second quarter, core online e-commerce revenues were down 10%, and adjusted profits declined 18%. That said, Alibaba shares are priced for this terrible environment to continue forever, and many of the exogenous issues should eventually abate. Signs suggest the regulatory pressure is already easing. The government has been stepping in with economic stimulus. The zero-COVID policy must eventually end. In addition, Alibaba’s management has taken important steps to improve profitability by reducing investments in loss-making new business ventures. When the environment improves, we believe that Alibaba’s core business franchises will return to growth, and profits will follow. The disconnect between Alibaba’s price and value continues to be one of the biggest we have seen in our careers.”
4. NVIDIA Corporation (NASDAQ:NVDA)
Market Capitalization: $672.48 billion
2022 Total Revenue: $26.97 billion
NVIDIA Corporation (NASDAQ:NVDA) is a Santa Clara, California-based technology company known for making the world’s fastest graphic processing units (GPUs). The company is aligning itself with the quantum computing revolution by launching new hardware and software. In March 2023, NVIDIA Corporation (NASDAQ:NVDA) introduced the CUDA Quantum, which is a platform to construct quantum algorithms by employing widely known classical computer coding languages like C++ and Python. The program also has the ability to choose whether to run the algorithm on a classical computer or quantum computing based on efficiency.
RiverPark Advisors shared its stance on NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2022 investor letter. Here’s what the firm said:
“NVIDIA Corporation (NASDAQ:NVDA): NVDA shares were our next top contributor on better-than-expected 4Q results and 1Q guidance. The stock also benefitted from the positive momentum around Artificial Intelligence and the Nvidia chips that drive it. While revenue was down -21% year over year, a rebound in the company’s gaming business helped drive revenue above Wall Street’s expectations.
NVDA is the leading designer of graphics processing units (GPU’s) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. After working through its near-term slowdown, we expect future growth to remain robust as NVDA chips and software are critical to many of the core technologies being adopted globally, including cloud computing, virtual reality, and artificial intelligence.”
3. Amazon.com, Inc. (NASDAQ:AMZN)
Market Capitalization: $1.13 trillion
2022 Total Revenue: $513.98 billion
Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based technology conglomerate with exposure to artificial intelligence, e-commerce, cloud computing, and digital streaming. Amazon Web Services (AWS), the cloud computing division of Amazon, provides access to quantum computing through its Amazon Braket service. Amazon Braket is a fully managed service that allows researchers and developers to access quantum computing hardware from different providers, such as D-Wave, IonQ, and Rigetti, as well as simulate quantum algorithms on classical computers.
Here’s what Vulcan Value Partners said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2023 investor letter:
“Additionally, Skyworks Solutions, Amazon.com, Inc. (NASDAQ:AMZN), and TransDigm Group were all material contributors during the quarter. We have discussed these companies at length in prior letters. Despite slowing growth and macro headwinds, Amazon experienced revenue growth in all three segments: AWS, Advertising, and Retail. Amazon is also addressing its cost structure to better align with its slower growth rates. We believe Amazon is a dominant, world-class company with powerful secular tailwinds. All three of these companies are executing well, their theses are intact, and we are pleased to own them at a discount to our estimate of intrinsic value.”
2. Alphabet Inc. (NASDAQ:GOOGL)
Market Capitalization: $1.371 trillion
2022 Total Revenue: $282.84 billion
Alphabet Inc. (NASDAQ:GOOGL) is a Mountain View, California-based technology holding company with companies like Google, YouTube, and Waymo under its wing. The corporation is one of the most prominent players in the quantum computing industry, having made significant advancements in developing quantum hardware and algorithms. Alphabet Inc. (NASDAQ:GOOGL) has 762 outstanding patents related to quantum computing. Google has developed the Sycamore quantum processor, which contains 54 superconducting qubits. Alphabet Inc. (NASDAQ:GOOGL) claims that the processor has achieved quantum supremacy as it can perform a calculation in just 3 minutes and 20 seconds, which would require a classical computer 10,000 years to perform.
Here’s what Vulcan Value Partners said about Alphabet Inc. (NASDAQ:GOOGL) in its Q1 2023 investor letter:
“Additionally, Skyworks Solutions, Amazon, Alphabet Inc. (NASDAQ:GOOG), KKR & Co., and TransDigm Group were all material contributors during the quarter. We have discussed these companies at length in prior letters. Alphabet reported mixed results in a tough environment. The company is working to adjust its cost structure in light of the current macroeconomic environment. All of these companies are executing well, their theses are intact, and we are pleased to own them at a discount to our estimate of intrinsic value.”
1. Microsoft Corporation (NASDAQ:MSFT)
Market Capitalization: $2.27 trillion
2022 Total Revenue: $204.1 billion
Microsoft Corporation (NASDAQ:MSFT) is a Redmond, Washington-based technology behemoth known for its diverse range of software, hardware, and consumer electronics. Microsoft Corporation’s (NASDAQ:MSFT) quantum computing technology is based on a topological qubit approach, which uses quasi-particles called Majorana fermions to create a highly stable and error-resistant qubit. The company’s quantum computing system consists of a set of interconnected qubits that can be programmed and manipulated using a set of control signals. Microsoft Corporation (NASDAQ:MSFT) has also developed a suite of software tools and algorithms for programming and simulating quantum computations, including the Microsoft Quantum Development Kit and the Microsoft Quantum Simulator.
Baron Funds shared its outlook on Microsoft Corporation (NASDAQ:MSFT) in its Q1 2023 investor letter. Here’s what the firm said:
“Shares of mega-cap software and cloud vendor Microsoft Corporation (NASDAQ:MSFT) performed well during the quarter despite mixed fiscal second quarter results. Microsoft’s largest consumer business, Windows licensed to computer vendors, decreased sharply year-over-year as last year’s results were bolstered by pandemic-related purchases. Its key commercial business, reported as Microsoft Cloud, grew 29% on a constant-currency basis, beating Wall Street expectations. Drilling down, its Azure cloud computing business also beat expectations, growing 38% on a constant-currency basis, but growth slowed in December, and management’s forward guidance was for further deceleration to a low 30% level. Since tougher macro trends emerged last year, cloud businesses, like Azure, have faced headwinds from enterprise customers optimizing their cloud workloads and spending, after a brisk pace of expansion over the last two years. Microsoft CEO Satya Nadella addressed this during the last earnings call: “Just as we saw customers accelerate their digital spend during the pandemic, we are now seeing them optimize that spend…. This is an important time for Microsoft to work with our customers, helping them realize more value from their tech spend and building long-term loyalty…. Moving to the cloud is the best way for any customer in today’s economy to mitigate demand uncertainty…while gaining efficiencies of cloud-native development…. I fundamentally believe tech as a percentage of GDP is going to be much higher…on a secular basis…. [W]hat [customers] accelerated during the pandemic, they’re making sure they’re getting most value out of it or optimizing it.… [A]t some point the optimizations will end…[and] the money that they save in any optimization of any workload is what they’ll plow into new workloads and those workloads will start ramping up.” Our research continues to indicate that the long-term secular trend of cloud computing remains healthy and intact and will only be boosted by the AI inflection. Morgan Stanley recently issued a report titled “Cloud Optimization: Short Term Pain for Long Term Gains.” It echoed Nadella’s commentary and our own internal research, concluding that today’s cloud optimization would ultimately yield “higher cloud adoption, upsizing [the] opportunity by 30% longer term.” The key finding of this report, supported by a survey of 80 chief information officers across the U.S. and Europe, was optimization is increasing the expected penetration of the cloud longer term, with 57% of workloads expected to reside in the cloud post-optimization vs. 45% of workloads pre-optimization.
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