Quantum computing is driving revolutionary breakthroughs comparable to the advent of electricity, reshaping science, AI, and data-driven industries. Its advancements are now tapping into scalable markets like GPS-free navigation, medical imaging, defense, and network communication.

In this transformative era, investors may find compelling opportunities in leading quantum computing stocks such as RTX Corporation (RTX), Northrop Grumman Corporation (NOC), and Nokia Oyj (NOK).

Organizations are gearing up for quantum disruption, signaling a growing market and rising customer readiness for practical applications. Increased funding and contracts, such as those for mobile quantum systems, highlight strong institutional and governmental backing. With the quantum computing market projected to exceed $10 billion by 2045, driven by a 30% CAGR, the sector’s growth potential is undeniable.

Notably, sectors like communication and defense have experienced significant valuation surges following quantum breakthroughs, underscoring market enthusiasm. The race to develop scalable, fault-tolerant quantum computers is driving rapid innovation and boosting returns. Consequently, the global QCaaS market is projected to reach $14.85 billion by 2028, growing at an impressive CAGR of 49.2%.

Considering these trends, let’s assess the fundamentals of the abovementioned quantum computing stocks.

RTX Corporation (RTX)

RTX is an aerospace and defense company that provides systems and services for commercial, military, and government customers internationally. It operates through three segments: Collins Aerospace, Pratt & Whitney, and Raytheon.

On January 3, 2025, RTX announced a $946 million contract to supply Romania with additional Patriot air and missile defense systems, including radars, control stations, and missiles. This marks Romania’s third Patriot order, reinforcing its commitment to collective security and stability in Europe.

On December 5, 2024, RTX announced a $590 million contract with the U.S. Navy to produce the Next Generation Jammer Mid-Band (NGJ-MB) system, a revolutionary electronic warfare solution used on EA-18G Growlers. The system targets advanced radar threats and enhances naval combat capabilities for both the U.S. Navy and the Royal Australian Air Force.

In terms of the trailing-12-month levered FCF margin, RTX’s 10.21% is 50.6% higher than the 6.78% industry average. Likewise, its 2.99% trailing-12-month Capex / Sales is 5.2% higher than the 2.84% industry average. Its 15.90% trailing-12-month EBITDA margin is 13.6% higher than the 14.01% industry average.

RTX’s sales for the third quarter ending September 30, 2024, increased 6% year-over-year to $20.09 billion. Its adjusted net income attributable to common shareholders rose 6.9% year-over-year to $1.95 billion, while its EPS increased 16% year-over-year to $1.45. In addition, the company’s free cash flow was $1.97 billion.

Street expects RTX’s EPS and revenue for the quarter ended December 31, 2024, to increase 5.4% and 3.2% year-over-year to $1.36 and $20.56 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. The stock has gained 34.5% over the past year to close the last trading session at $114.80.

RTX’s POWR Ratings reflect strong fundamentals. It has an overall rating of B, translating to a Buy in our proprietary system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It is ranked #8 out of 70 stocks in the Air/Defense Services industry. It has an A grade for Momentum and a B for Growth. To see RTX’s Value, Stability, Sentiment, and Quality ratings, click here.

Northrop Grumman Corporation (NOC)

NOC operates as an aerospace and defense company worldwide. It operates through the Aeronautics Systems, Defense Systems, Mission Systems, and Space Systems segments.

On October 9, 2024, NOC unveiled the M230LF Dual Feed Bushmaster Chain Gun, the first medium-caliber cannon with dual-feed capability, allowing operators to switch between two ammunition types. This innovation enhances flexibility for counter-UAS and ground engagements, with live fire demonstrations scheduled for early 2025.

In terms of the trailing-12-month Return on Common Equity, NOC’s 15.48% is 14.1% higher than the 13.57% industry average. Similarly, its 4.28% trailing-12-month Capex / Sales is 50.7% higher than the 2.84% industry average. Its 0.88x trailing-12-month asset turnover ratio is 12.2% higher than the 0.78x industry average.

NOC’s net revenues for the fiscal third quarter that ended September 30, 2024, amounted to $10 billion, up 2.3% year-over-year. Likewise, its total operating income rose 10.2% from the year-ago quarter to $1.12 billion. In addition, the company’s net earnings and EPS were $1.03 billion and $7, up 9.5% and 12.9% over the prior-year quarter, respectively.

For the quarter ended December 31, 2024, NOC’s revenue is expected to increase 2.9% year-over-year to $10.95 billion. Its EPS for the same quarter is expected to rise 1% year-over-year to 6.33. It surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past six months, the stock has gained 4.1% to close the last trading session at $452.39.

NOC’s robust outlook is reflected in its POWR Ratings. It has an overall rating of A, equating to a Strong Buy in our proprietary rating system.

NOC has an A grade for Momentum and a B for Value, Stability, and Sentiment. Within the Air/Defense Services industry, it is ranked #3. To see NOC’s ratings for Growth and Quality, click here.

Nokia Oyj (NOK)

Headquartered in Espoo, Finland, NOK provides mobile, fixed, and cloud network solutions worldwide. The company operates through four segments: Network Infrastructure, Mobile Networks, Cloud and Network Services, and Nokia Technologies.

In terms of the trailing-12-month Return on Total Capital, NOK’s 4.93% is 58.8% higher than the 3.11% industry average. Its 2.34% trailing-12-month Capex / Sales is 15.8% higher than the industry average of 2.02%. Also, its 10.29% trailing-12-month EBIT margin is 89.5% higher than the industry average of 5.43%.

During the fiscal third quarter that ended September 30, 2024, NOK’s net sales amounted to €4.33 billion ($4.50 billion). Likewise, its operating profit increased 3.8% year-over-year to €246 million ($255.41 million). In addition, its profit for the period and EPS grew 31.6% and 50% year-over-year to €175 million ($185.70 million) and $0.03, respectively.

Analysts expect NOK’s EPS for the quarter ended December 31, 2024, to increase 25% year-over-year to $0.14. Its revenue for fiscal 2025 is expected to grow 1.2% year-over-year to $20.07 billion. NOK’s stock has gained 34.6% over the past year to close the last trading session at $4.63.

It’s no surprise that NOK has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

It has an A grade for Value and a B for Growth and Momentum. Within the B-rated Technology – Communication/Networking industry, it is ranked #6 out of 45 stocks. Beyond what we stated above, we also have given NOK grades for Stability, Sentiment, and Quality. Get all the NOK ratings here.

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RTX shares were trading at $115.48 per share on Wednesday morning, up $0.68 (+0.59%). Year-to-date, RTX has declined -0.21%, versus a 0.60% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More...

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