Wall Street Favorites: 3 Quantum Computing Stocks with Strong Buy Ratings for March 2024

Stocks to buy

Recent inflationary pressures aside, the U.S. economy shows resilience and potential growth. The addition of 275,000 jobs in February has left many economists and policymakers cautiously optimistic about our economic outlook. The quantum computing sector stands to benefit from this optimism, as it has a projected CAGR of 48.1%, reaching $6.5 billion by 2028, showing impressive potential. These three quantum computing stocks are going to benefit from this growth and drive strong profits.

Alphabet (GOOG, GOOGL)

Alphabet Inc. (GOOG, GOOGL) and Google logos seen displayed on a smartphone

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Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) provides various services under the Google brand name. Its SaaS products include Google Search, Adsense, YouTube, Google Cloud, Google Workspace and more. It is also expanding into both AI, and shows promise to become one of the top quantum computing stocks.

Alphabet has consistently beaten earnings estimates, with rising profitability and revenue, making it a stable investment. Analysts predict an average growth potential of around 16.17%. A profit margin of 24.01%, YOY quarterly growth of 51.80%, and a return on equity of 27.36% show management’s efficiency. Additionally, Yahoo Finance! gives GOOG a buy rating, which various financial institutions echo.

Rapid sector growth coupled with innovation put Alphabet in a great position. Recently, it launched a $5 million challenge for quantum applications. It also has released plans for post-quantum cryptography and has started to encrypt data in quantum-safe algorithms. This shows Alphabet’s bullish stance on quantum technology.

Rapid growth in sectors in which GOOG is innovating suggests that revenue will continue to grow making it a ‘strong buy’ among quantum computing stocks.

International Business Machines (IBM)

The IBM 5160 is a version of the IBM PC with a built-in hard drive. Released on March 8, 1983. The 5100 series are knowns as one of the first home computers.

Source: Twin Design / Shutterstock.com

International Business Machines (NYSE:IBM) is an international business machine corporation specializing in quantum computing. It is valued at $195.95, a 53.03% YOY appreciation.

IBM has shown significant revenue growth by an increase of 20.29% from 2023-2024, seeing profits escalate from $149.34 billion to $179.63 billion. In addition, EBIT Margin (TTM) also showed promise at 16.00%, compared to the sector median of 4.78%, which is 234.78% more. EPS GAAP Growth (YOY) was astonishing at 352.22% or 45,675.72% more than the sector median of 0.77%. Furthermore, dividend yield (TTM) was ample at 3.39%, 132.52% more than the sector average of 1.46%.

IBM boasts the largest quantum computing fleet worldwide due to its new quantum computing service and programming model​​, Qiskit Runtime. This device uses 433 qubits, allowing the user to intuitively maximize the composition of circuits. This product is an innovation in the quantum computing industry, and as sales skyrocket, the stock will also quickly grow. 

Overall, Qiskit Runtime and strong financials make IBM stock a “must-buy” with a high ceiling and significant growth potential in 2024.

Honeywell (HON)

Honeywell (HON) logo on front of glass building

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Honeywell (NASDAQ:HON) is an American technology company focused on the development and manufacturing of technology devices and products targeted at diverse sectors. Currently valued at $199.13, HON saw a yearly growth of 3.12% but is set to expand in 2024.

Valued at $44.2 billion in 2023, the engineering software industry is forecasted to reach $87.8 billion by 2030, marking a strong CAGR of 10.3% during this period. With an over 1.4% market share, expect Honeywell to reap the industry’s success.

The largest backbone for Honeywell’s financials comes from the large revenue successes. In Q4 2023, Honeywell reported $9.44 billion in revenue, a YOY increase of 2.77%. Further successes were revealed in other categories, with net income being marked at $1.26 billion or a 23.95% YOY increase, along with diluted EPS being marked at $1.91 or a 26.49% yearly increase. 

The largest catalyst for Honeywell stems from its newfound focus and realignment of its portfolio into the specific trends of aerospace technologies, industrial automation, building automation and energy and sustainability solutions. With these four new categories being prioritized under the business plan, expect Honeywell to expand its quantum services to larger customers and compete for a larger market share in the industry.

On the date of publication, Michael Que did not have (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.

The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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