Innovative technology in its early stages can present enticing opportunities for investors. When the internet was first released to the public, it introduced many investment opportunities. While many of these investments lost momentum, some assets created generational wealth for long-term investors.
Quantum computing expands the capabilities of regular computing. It allows businesses and individuals to store more data and solve more complex problems. It’s a more innovative and effective approach than the binary computing model currently in use.
Large firms are pouring their capital into quantum computing, a move that can reward long-term investors. If you want exposure to this industry, you may benefit from investing in these three quantum computing stocks.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) has gained 34% year-to-date and is up by 188% over the past five years. The company currently has a 33 P/E ratio and a dividend yield approaching 1%.
Microsoft has exposure to many industries, such as PCs, video game consoles and cloud computing. The tech giant also happens to be a prominent player in the quantum computing industry.
The company’s Azure Quantum platform has been a big hit for consumers and businesses. Azure generated 26% year-over-year revenue growth for the company and can help drive the next stage of the conglomerate’s development.
This revenue growth rate is higher than the company’s overall 8% year-over-year revenue growth rate. Azure is part of the company’s Intelligent Cloud segment. That segment generated $24.0 billion in revenue in the 4th fiscal quarter of 2023, representing 42% of the company’s total revenue.
As quantum computing advances and becomes more mainstream, one of Microsoft’s top sources of revenue growth and profitability can accelerate. Investors looking for quantum computing stocks to buy may benefit from accumulating MSFT shares.
Honeywell International (HON)
Honeywell International (NASDAQ:HON) is an industrial and tech conglomerate with exposure to many business industries. The company has products and services related to aerospace, industrial chemicals, automation, advanced sensing technologies and other verticals.
Honeywell International shares have gained 22% over the past five years and have a 2.21% dividend yield. The stock also currently trades at a 23 P/E ratio. During its most recent quarter, the firm reported a 2.2% year-over-year increase in sales and a 17.9% year-over-year jump in net income.
HON is a quantum computing business due to its ownership of Quantinuum. The quantum computing company has nearly 400 employees. Honeywell has promised to commit up to $300 million to Quantinuum, demonstrating the firm’s belief in innovative technology.
Some people predict quantum computing will become a $1 trillion industry. Investors may benefit from accumulating shares in Honeywell International stock while the Quantinuum growth story is still in its early stages.
FormFactor (FORM)
Quantum computing investors often have to buy large-cap tech conglomerates that treat quantum computing as a small business segment. FormFactor (NASDAQ:FORM) is a much smaller company that gives investors more exposure to quantum computing.
FormFactor is a $2 billion company, whose stock gained 42% year-to-date and about doubled over the past five years. The company’s earnings haven’t been the best recently, but the firm has maintained net profits.
FORM is a semiconductor company that provides tests and measurement technologies for its clients. Quantum computing investors should pay close attention to the company’s systems segment, which contains the company’s Quantum Cryogenics product.
Companies that want quantum chips will have to turn to providers like FormFactor. A rising demand for quantum computing and commercialization of the technology can help the business significantly.
Note that FORM is riskier than Microsoft and Honeywell International. Still, its status as a small-cap company implies a higher potential upside if quantum computing takes off.
On the date of publication, Marc Guberti did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.