In this article, we will take a look at the 9 quantum computing stocks billionaires are piling into.
In the continuously evolving realm of technology, quantum computing emerges as one of the most promising and revolutionary fields. By leveraging the principles of quantum mechanics, quantum computing holds the capacity to address intricate problems at an unparalleled speed, surpassing the capabilities of classical computers. Among the advancing global tech industry, quantum computing is in expansion mode, with funding from both, the public and private sectors, set to propel it to unfathomable heights.
A cumulative sum of $34 billion in government investments has been declared for quantum computing, albeit with varying distribution timelines among different countries. Notably, China and the European Union contribute to over two-thirds of this overall investment. The U.S. government, having augmented its funding for quantum computing, including a $1.8 billion announcement in 2022, reveals a total committed investment of $3.7 billion. The convergence of financial and resource allocations for quantum computing, both in the public and private sectors, has the potential to yield significant advancements over the next 12 to 15 years. McKinsey, following discussions with technology executives, investors, and quantum computing experts, estimated that 72% of respondents look forward to the emergence of a fully fault-tolerant quantum computer by 2035. Conversely, the remaining 28% believe that achieving this milestone will extend beyond 2040.
While Alphabet Inc. (NASDAQ:GOOG) and International Business Machines Corporation (NYSE:IBM) engage in a competitive race to develop a reliable quantum computer, prominent financial institutions like JPMorgan Chase & Co. (NYSE:JPM) and Visa Inc. (NYSE:V) are exploring potential applications for this technology. Within the financial sector, machine learning algorithms are anticipated to improve tasks such as fraud detection in transactions, portfolio optimization, and options pricing. In the medical field, Moderna, Inc. (NASDAQ:MRNA) and IBM joined forces in April 2023 to leverage generative artificial intelligence and quantum computing to enhance mRNA technology, the foundational technology behind Moderna’s highly successful COVID vaccine.
In another vein, the trajectory of the quantum computing industry’s growth is partially contingent on the proliferation of Quantum Computing as a Service (QCaaS). QCaaS is a cloud-based platform enabling users to access and leverage quantum computing resources via the internet. This approach offers individuals and organizations the ability to tap into the capabilities of quantum computers without the need to construct and manage their quantum hardware infrastructure. Research conducted by a subsidiary of the Quantum Daily predicts that the QCaaS industry’s size will expand from an anticipated $4 billion in 2025 to $26 billion by 2030.
With these details in mind, let’s take a look at some of the best quantum computing stocks that billionaires love, out of which the top picks include Hewlett Packard Enterprise Company (NYSE:HPE), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA).
A close-up of a network administrator’s hands working on a cloud computing server.
Our Methodology
We leveraged Insider Monkey’s repository of billionaire-owned stocks to compile a selection of top quantum computing stocks that garnered the highest interest from billionaire investors in Q3 2023. The compilation comprises prominent technology firms with substantial involvement in the quantum computing sector. The ranking of the best quantum computing stocks is arranged in ascending order based on the count of billionaires holding stakes in them. Additionally, details about the total number of hedge fund investors in these companies as of the third quarter of the year have been provided.
9. International Business Machines Corporation (NYSE:IBM)
Number of Hedge Fund Holders: 53
Number of Billionaire Investors: 14
The International Business Machines Corporation (NYSE:IBM), often referred to as “Big Blue,” is a prominent American multinational technology company headquartered in Armonk, New York. IBM is at the forefront of the quantum computing revolution, possessing proprietary computing chips and operating systems that are integral to its Quantum System One quantum computer, unveiled in 2019. International Business Machines Corporation (NYSE:IBM) has achieved significant commercial progress with its initiatives, with 210 entities spanning diverse industries—including Raytheon Technologies, Sony Group Corporation, Samsung Electronics Co. Ltd., and the U.S. government—currently utilizing IBM’s quantum computing programs or engaging in partnerships to enhance quantum computing systems.
International Business Machines Corporation (NYSE:IBM), on December 4, introduced a groundbreaking quantum computing chip and machine, positioning them as foundational elements for significantly larger and faster systems compared to conventional silicon-based computers. IBM’s innovative approach involves a novel method of interconnecting chips within machines and subsequently linking these machines. Combined with a new error-correction code, this advancement paves the way for the development of quantum machines by the year 2033. International Business Machines Corporation (NYSE:IBM) intends to leverage this new chip in its enterprise AI platform, Watsonx.
At the end of the third quarter, there were 53 funds tracked by Insider Monkey that held long positions in International Business Machines Corporation (NYSE:IBM) with a total value of $843.12 million.
Similar to Hewlett Packard Enterprise Company (NYSE:HPE), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA), International Business Machines Corporation (NYSE:IBM) is a quantum computing stock that billionaires love.
8. Hewlett Packard Enterprise Company (NYSE:HPE)
Number of Hedge Fund Holders: 47
Number of Billionaire Investors: 15
Hewlett Packard Enterprise Company (NYSE:HPE) is a multinational information technology company headquartered in Spring, Texas, USA, established on November 1, 2015, post the split of the Hewlett-Packard company in Palo Alto, California. In Q3 2023, Hewlett Packard Enterprise Company (NYSE:HPE) achieved notable success in its Intelligent Edge segment, encompassing Internet of Things (IoT), Operational Technology (OT) devices, and edge computing hardware. The Intelligent Edge segment recorded revenues of $1.4 billion, marking a significant 50% increase compared to the corresponding quarter of the previous year, constituting around 20% of HPE’s total earnings for the quarter.
On October 20, UBS analyst David Vogt raised the firm’s price target for Hewlett Packard Enterprise Company (NYSE:HPE) to $16, up from the previous target of $15, maintaining a “Neutral” rating on the company’s shares. According to the analyst, the company outlined substantial Total Addressable Market (TAM) expansion, particularly in Networking and Artificial Intelligence, supporting a multi-year revenue growth target of 2%-4% in constant currency terms.
As of the close of Q3 2023, 47 hedge funds tracked by Insider Monkey reported holding stakes in Hewlett Packard Enterprise Company (NYSE:HPE), showing a slight decline from 50 in the previous quarter. The total value of these stakes is approximately $864.4 million.
7. Honeywell International Inc. (NASDAQ:HON)
Number of Hedge Fund Holders: 60
Number of Billionaire Investors: 16
Honeywell International Inc. (NASDAQ:HON) is a publicly traded American multinational conglomerate corporation. The company’s main business operations are divided into four areas: aerospace, building technologies, performance materials and technologies, and safety and productivity solutions. Quantinuum, the quantum computing venture jointly owned by Honeywell Quantum Solutions and Cambridge Quantum, achieved a historic milestone in hardware by recording the highest quantum volume measurement to date. On September 12, Quantinuum unveiled the Quantum Monte Carlo Integration engine, designed to address problems lacking analytic solutions. This includes challenges in various domains such as pricing financial derivatives, tackling advanced issues in business, energy, and supply chain logistics, among others.
On October 26, 2023, Honeywell International Inc. (NASDAQ:HON) published its Q3 2023 earnings report, demonstrating a robust performance that met or exceeded the company’s projections. The report revealed a 3% year-over-year increase in sales and a 2% growth in organic sales, driven by substantial organic sales growth in commercial aviation, defense and space, and process solutions. Earnings per share for the third quarter stood at $2.27, showing marginal change on a reported basis compared to the previous year and a 1% increase year over year on an adjusted basis.
By the end of this year’s third quarter, 60 among the 910 hedge funds polled by Insider Monkey had bought and owned Honeywell International Inc. (NASDAQ:HON)’s shares. John Overdeck and David Siegel’s Two Sigma Advisors is the largest shareholder among these through a $406 million investment
6. Intel Corporation (NASDAQ:INTC)
Number of Hedge Fund Holders: 70
Number of Billionaire Investors: 17
Intel Corporation (NASDAQ:INTC) is a California-based American multinational corporation and technology company with its headquarters in Santa Clara. Recognized as one of the global leaders in semiconductor chip manufacturing based on revenue, Intel has played a pivotal role in advancing the x86 series of instruction sets, widely utilized in personal computers. Intel Corporation (NASDAQ:INTC) also developed Tunnel Falls, its cutting-edge silicon spin qubit chip, marking a significant stride toward the development of a commercial quantum computing system. The company is making this chip available to the quantum research community, aiming to foster advancements and innovation in the field.
Intel Corporation (NASDAQ:INTC) witnessed a notable 9% upswing in its stock value on October 27, propelled by the unveiling of the company’s third-quarter financial results that exceeded projections. The remarkable performance can be credited to the triumph of Intel’s foundry business, increased enthusiasm for artificial intelligence, and encouraging indications of a rebound in the PC market. Intel Foundry Services (IFS), responsible for manufacturing chips for corporate and government clients, delivered exceptional outcomes, achieving $311 million in revenue, representing a substantial 299% growth compared to the corresponding period in the previous year.
As of the end of Q3 2023, 70 hedge funds tracked by Insider Monkey reported having stakes in Intel Corporation (NASDAQ:INTC), down from 71 in the previous quarter. The consolidated value of these stakes is over $2.13 billion. With over 11 million shares, Millennium Management was the company’s leading stakeholder in Q2.
ClearBridge Investments commented on Intel Corporation (NASDAQ:INTC) in its third quarter 2023 investor letter. Here is what it said:
“We also added to our position in Intel Corporation (NASDAQ:INTC) to take advantage of signs that it continues to make progress on its goal of regaining technology leadership. Intel appears to be executing its technology/product roadmap; the company is on track to ramp up PC and server products over the next 12 months on advanced manufacturing nodes that we believe will be more competitive with chief rival Advanced Micro Devices. We also see green shoots in the PC and server markets, with an increasing possibility of a cyclical recovery in both end markets in 2024.”
Much like Hewlett Packard Enterprise Company (NYSE:HPE), Microsoft Corporation (NASDAQ:MSFT), and NVIDIA Corporation (NASDAQ:NVDA), Intel Corporation (NASDAQ:INTC) is one such stock that billionaires are piling into.
5. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM)
Number of Hedge Fund Holders: 107
Number of Billionaire Investors: 20
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is a leading Taiwanese semiconductor manufacturing firm that focuses on producing chips for companies such as NVIDIA Corporation (NASDAQ:NVDA). In November, the company provided encouraging updates to investors, revealing its first monthly uptick in sales since February. This positive development was attributed to increased demand for smartphones and artificial intelligence. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has begun delving into quantum computing through a five-year strategic partnership with Taiwan’s Ministry of Science and Technology. This collaboration serves as a cornerstone in TSM’s strategy to leverage its newly established cloud computing platform for the development of quantum computing applications destined for the commercial market.
On November 13, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) announced a significant 34.8% month-over-month increase in its October net revenue, reaching nearly NT$243.2 billion, accompanied by a year-over-year growth of 15.7%.
In the third quarter of 2023, 107 hedge funds had ownership of Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM). Fisher Asset Management emerged as the primary investor in the company, augmenting its holdings to 30.637 million shares, valued at $2.66 billion.
Wedgewood Partners talked about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its third quarter 2023 investor letter. Here is what it said:
“Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance, as revenues declined 10% from a year ago. The Company is lapping revenue growth of over +40% (compared to 2022) during every quarter of 2023, so it is more instructive to look at the health of the business through the lens of a multi-year timeframe. Most of the Company’s customers have seen near-term weakness in demand due to pandemic normalization. However, we think the longer-term trend of more silicon per device is still very much intact, and the Company is well-positioned to serve this, given its commanding market share in leading edge capacity. The Company’s aggressive investment in leading-edge equipment combined with tight development with fabless IC designers, plus the embrace of open development libraries, should continue to foster a superior competitive position and attractive long-term growth.”
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 163
Number of Billionaire Investors: 22
A prominent player in the technology sector, Alphabet Inc. (NASDAQ:GOOG) is anchored by Google, a search engine that processes billions of daily queries. The company possesses diverse platforms for video streaming and productivity, with YouTube standing out as a notable asset. Additionally, Alphabet Inc. (NASDAQ:GOOG) is involved in the retail of electronic devices, including smartphones, ultra-thin notebooks, and speakers. The company has positioned itself as one of the leading quantum computing firms globally with Bristlecone. The 72-qubit quantum processor by Alphabet reduces data testing error rates while seamlessly integrating with the necessary software applications and control electronics for field operations. Additionally, in 2022, the company established its quantum computing and artificial intelligence private entity called Sandbox AQ. This venture has begun to make strides in commercially viable sectors such as GPS mapping, drug development, and cybersecurity.
As of the conclusion of the third quarter of 2023, 163 hedge funds held stakes in Alphabet Inc. (NASDAQ:GOOG). The largest stakeholder in the company was Fisher Asset Management, managed by Ken Fisher, which owns a stake valued at $5.72 billion.
Ensemble Capital Management made the following comment about Alphabet Inc. (NASDAQ:GOOG) in its Q3 2023 investor letter:
“Alphabet Inc. (NASDAQ:GOOG) (+9.32%): Separate from all the discussion of artificial intelligence, Google’s core Search business, having experienced a significant slowdown in 2022, now shows clear signs of reacceleration. While the future of AI and its impact on Google is still subject to a healthy debate, the company seems to have put to bed investor concerns about any rapid negative impact. With Search revenue growth accelerating, and the company rolling out lots of new AI tools, the investor panic from the beginning of the year about AI immediately hurting Google appears to have been overblown.”
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 180
Number of Billionaire Investors: 29
Headquartered in Santa Clara, California, Nvidia Corporation (NASDAQ:NVDA) is an American multinational technology company incorporated in Delaware. Recognized for its expertise in integrated circuit development, Nvidia’s capabilities span a diverse range of devices, from electronic game consoles to personal computers (PCs).his summer, the company achieved another quantum computing breakthrough with the launch of what they refer to as “a unified computing platform designed to accelerate advancements in quantum research and development across AI, high-performance computing, health, finance, and other disciplines.” Known as the Nvidia Quantum Optimized Device Architecture (QODA), it aims to make quantum computing more accessible by providing a “hybrid, open, and unified environment for some of today’s most powerful computers and quantum processors.”
On November 21, NVIDIA Corporation (NASDAQ:NVDA) reported its financial results for the third quarter, ending on October 29, 2023. The company disclosed a revenue of $18.12 billion, marking a significant 206% increase compared to the same period last year and a notable 34% rise from the previous quarter. The quarter recorded GAAP earnings per diluted share at $3.71, reflecting a more than 12-fold increase from a year ago and a 50% uptick from the previous quarter. Non-GAAP earnings per diluted share were $4.02, indicating an almost 6-fold rise from a year ago and a 49% increase from the previous quarter.
Insider Monkey took a look at hedge fund portfolios for NVIDIA Corporation (NASDAQ:NVDA)’s Q3 2023 investments and found out that 180 had a stake in NVIDIA Corporation (NASDAQ:NVDA). Citadel Investment Group was its biggest stakeholder which has roughly 21.85 million stakes for about $9.5 billion of NVIDIA Corporation (NASDAQ:NVDA).
Baron Opportunity Fund made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2023 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) is a leading semiconductor company that sells chips and software for accelerated computing and gaming. Shares have nearly tripled year-to-date, as the company continues reporting unprecedented growth because of the acceleration in demand for its data center chips. After reporting revenue of $7 billion in the first quarter and providing guidance of $11 billion for the second quarter, NVIDIA reported second quarter revenue of $13.5 billion and guided for another step up in the third quarter to $16 billion, with its CFO declaring “[d]emand for our Data Center platform for AI is tremendous and broad-based across industries and customers.” We are at the tipping point of a new era of computing with NVIDIA at its epicenter. This is how CEO and founder Jensen Huang put it (during the company’s August 23 earnings call):
“[T]he easiest way to think about the demand is the world is transitioning from general purpose computing to accelerated computing…[W]hat you’re seeing companies do now is recognizing this…tipping point…recognizing the beginning of this transition, and diverting their capital investment to accelerated computing and generative AI…This isn’t a singular application that is driving the demand, but this is a new computing platform…a new computing transitioning that’s happening…A new computing era has begun. The simultaneously going through two platform transitions, accelerated computing and generative AI.””
2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Number of Billionaire Investors: 33
Amazon.com, Inc. (NASDAQ:AMZN), a prominent American multinational technology company, is engaged in various business sectors, including e-commerce, cloud computing through Amazon Web Services (AWS), online advertising, digital streaming, and artificial intelligence. The company’s Amazon Braket is a comprehensive quantum computing service that is fully managed, aiming to accelerate scientific research and software development within the quantum computing realm. This service grants AWS customers access to various quantum computing technologies offered by multiple providers. These technologies include superconducting, trapped ion, neutral-atom, and photonic quantum computers, and the providers encompass IonQ, OQC, QuEra, and Rigetti.
On November 2, HSBC initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN) with a “Buy” rating and a price target of $160. The analysts at the firm emphasized that Amazon’s potential in the cloud computing space surpasses its strong customer loyalty in e-commerce. HSBC also highlighted Amazon Web Services (AWS) as one of the most compelling narratives in the technology sector. Additionally, the firm stated that any short-term growth challenges do not undermine the long-term growth prospects of the company.
Based on data from Insider Monkey’s database, a total of 286 elite hedge funds held positions in Amazon.com, Inc. (NASDAQ:AMZN) stock, with a collective stake value of $38.8 billion. This represents an increase from the 278 hedge funds that collectively held a stake valued at $34.9 billion previously. Notably, Ken Fisher’s Fisher Asset Management emerged as the most significant stakeholder in the company, with 41.35 million shares valued at $5.25 billion.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 306
Number of Billionaire Investors: 34
Headquartered in Redmond, Washington, Microsoft Corporation (NASDAQ:MSFT) is a leading technology company that provides a wide array of products. These offerings encompass operating systems, cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft Corporation (NASDAQ:MSFT), through its Azure Quantum, also offers a wide range of quantum solutions and technologies. The service is specifically designed to assist quantum chemists and other scientists in rapidly scaling and accelerating their research efforts. Azure Quantum Elements, a component of this service, provides researchers with the tools to make significant strides in chemistry and materials science by leveraging the scale, speed, and precision of the latest advancements in high-performance computing (HPC), artificial intelligence, and quantum computing.
Microsoft Corporation (NASDAQ:MSFT) is extending its longstanding four-year collaboration with Oracle, streamlining the integration of Microsoft Azure’s AI services with the Oracle database for enhanced efficiency. This move, coupled with a robust 29% year-over-year growth in Azure cloud revenues during the fiscal first quarter of 2024, this move highlights Microsoft Corporation (NASDAQ:MSFT)’s leadership in the realm of quantum computing.
In the third quarter of 2023, Microsoft Corporation (NASDAQ:MSFT) stands out as the most favored stock among the 910 hedge funds monitored by Insider Monkey, holding the top position in hedge fund sentiment. A total of 306 hedge funds included shares of this software giant in their portfolios, reflecting a cumulative value of $72 billion.
In its Baron Technology Fund Q3 2023 investor letter, Baron Funds made the following comments about Microsoft Corporation (NASDAQ:MSFT):
“Looking at the big picture, Microsoft continues to execute at a high level, navigating a challenging macro backdrop while aggressively investing in long-term growth, and we remain confident that Microsoft is well positioned to leverage AI over the medium to long term as it infuses Open AI and other generative AI technologies across its entire product portfolio.”
You can also take a peek at 15 Best Cybersecurity Stocks To Buy and 25 Smartest Countries in the World.
Suggested articles:
- 10 Most Undervalued Oil Stocks To Buy According To Hedge Funds
- 16 Most Undervalued Small-Cap Stocks To Buy According To Hedge Funds
- 15 Best Safe Dividend Stocks For 2024
Disclosure: None. 9 Quantum Computing Stocks Billionaires Are Piling Into is originally published on Insider Monkey.
