We recently published a list of 11 Best Quantum Computing Stocks to Buy Right Now. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against other best quantum computing stocks to buy right now.

Quantum computing continues to advance rapidly, which has been helping businesses get new opportunities related to security, AI, optimization, and scientific discovery. As per PwC, the increasing recognition of quantum computing’s potential to revolutionize numerous industries has placed the momentum for significant breakthroughs. For example, quantum simulations in healthcare enable scientists to model complex molecular interactions, which helps in ramping up the discovery of new drugs and materials.

Therefore, quantum has the potential to advance complex problem-solving, speed up the scientific discovery, and lead to the development of entirely new technologies. PwC believes that quantum possesses numerous implications for operational, R&D, and security and controls.

What Lies Ahead for Quantum Computing Industry?

As per Stellar Market Research, quantum computing use cases are expected to have a hybrid operating model, representing a blend of quantum and traditional high-performance computing until around 2032. For instance, a quantum-inspired algorithm can result in improvements in traditional high-performance computers. Fortune Business Insights believes that the quantum computing market growth is expected to be fueled by advanced problem-solving, AI advancements, and global investments.

Commonwealth Scientific and Industrial Research Organisation (CSIRO) mentioned that the United Nations has designated 2025 to be the International Year of Quantum Science and Technology. Over the upcoming years, quantum chips are expected to scale up. Furthermore, the next generation of quantum processors are expected to be supported by logical qubits. Through the use of quantum simulations on normal computers, the researchers continue to develop and test numerous quantum algorithms. When the quantum hardware catches up, this can make quantum computing ready for useful applications, says the firm.

READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.

Our Methodology

To list the 11 Best Quantum Computing Stocks to Buy Right Now, we sifted through several online rankings to shortlist the companies catering to the broader quantum computing sector. Next, we chose the ones that are popular among the hedge funds. Finally, the stocks are ranked in ascending order of their hedge fund sentiments, as of Q4 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 317

Microsoft Corporation (NASDAQ:MSFT) remains involved in the quantum computing business via its Azure Quantum platform and the development of topological qubits. The company has rolled out Majorana 1, the world’s first quantum chip powered by a new Topological Core architecture. The company expects that it will realize quantum computers capable of solving meaningful, industrial-scale problems in years, not decades. It leverages the world’s first topoconductor, a breakthrough type of material, that can observe and control Majorana particles to produce more reliable and scalable qubits. The topological qubits are projected to have increased stability and lower error rates, which can make Microsoft Corporation (NASDAQ:MSFT)’s hardware more scalable.

Furthermore, integrating Majorana 1 into the Azure Quantum can make it the cloud provider that has topological qubit-based quantum computing. Also, Microsoft Corporation (NASDAQ:MSFT) has partnered with Quantinuum and Atom Computing to reach scientific and engineering breakthroughs. Such alliances are expected to enhance Microsoft Corporation (NASDAQ:MSFT)’s Azure Quantum platform, hardware research, and hybrid quantum-cloud solutions. Also, these partnerships can accelerate error correction as well as fault tolerance, which happens to be a critical step focusing on practical quantum computing.

Bretton Capital Management, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Microsoft Corporation (NASDAQ:MSFT) has become the go-to provider of computing services for many emerging AI companies, and its franchise is much more diversified than Alphabet’s, making it a net beneficiary of the AI arms race. Demand for its cloud computing services continued to grow, and the rest of its business (Orce, Windows, Xbox, GitHub, LinkedIn) are also thriving, sending earnings per share up 22% while the stock returned 13%.”

Overall, MSFT ranks 1st on our list of best quantum computing stocks to buy right now. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.