Wall Street is excited about quantum computing as the next big thing in investing, after AI. However, IBM has not yet joined the group. There is a mistake, said Ben Reitzes, an expert at Melius Research, on Wednesday.
Google parent Alphabet Inc. GOOGL -0.63% GOOG -0.52% and a few other names, like Quantum Computing Inc. QUBT +51.53%, Rigetti Computing Inc. RGTI +32.03%, D-Wave Quantum Inc. QBTS +16.18%, and IonQ Inc. IONQ +4.86%, have seen their share prices rise. But Reitzes said that IBM’s stock has been overlooked.
In the fourth quarter, IBM’s stock has only gone up 4%. Alphabet is up 17% since the beginning of the month, when the company said that its Willow engine was making progress in quantum computing. That caused stocks like Quantum Computing to go up.
In a study note, Reitzes said, “No one is talking about IBM Quantum.” “Quantum stocks are going through the roof!” In the long run, IBM seems to have more quantum meat on the bone than anyone else, not even Google.
Reitzes gave IBM another “buy” rating and said that the tech giant’s stock is worth about $255 (it closed Tuesday at $228.97), but that its experience with quantum computing is a “added bonus” in the long run.
Since the 1980s, he said, IBM has been a leader in qubits, which are very small pieces of data used in quantum computers. This kind of qubit can show both 0 and 1 at the same time, which speeds up processing.
“We think quantum could bring IBM billions of dollars in sales and profits in the 2030s, with a “best guess” of materiality in 2029,” Reitzes said.
He said it was likely that IBM would offer quantum computing as a hosted service along with its technical and advising services. He said that one possible use would be to better protect the safety of digital monies.
At an analyst day on February 4, IBM is likely to give more information about its plans for quantum computing.
Reitzes said, “There’s a chance that IBM can help quantum cure cancer or help us live on Mars.”
