Quantum computing is emerging as the next battleground in the global semiconductor race. The U.S.-China rivalry, initially focused on AI chips, is increasingly expanding into quantum infrastructure, advanced lithography and strategic supply chains. Washington’s export restrictions on advanced semiconductors and chipmaking equipment, first introduced in 2022 and tightened repeatedly through 2025-2026, now extend beyond AI into broader national-security technologies, including quantum-related capabilities.
Washington now views advanced chips, semiconductor manufacturing equipment and related technologies as critical to military competitiveness and economic security. In January 2026, the White House proposed additional measures under Section 232 to strengthen domestic semiconductor manufacturing and reduce dependence on foreign supply chains.
Accordingly, investor attention is rapidly shifting toward companies positioned at the intersection of advanced semiconductors and next-generation quantum computing architectures. However, amid rising investor enthusiasm, many semiconductor stocks have already climbed to or near their all-time highs, increasing concerns over near-term valuation corrections. Against this backdrop, ASE Technology ASX and IonQ IONQ are two closely watched names for investors seeking exposure to the evolving semiconductor-quantum computing space, with both stocks carrying potential for more than 15% upside in the near term.
Quantum and Semiconductor Investments Accelerate
Quantum computing and advanced semiconductors are rapidly becoming central to global technology investment as governments and corporations race to secure leadership in next-generation computing infrastructure. According to McKinsey & Company, governments worldwide announced more than $10 billion in quantum-related public funding initiatives in early 2025 alone, reflecting accelerating strategic interest in the sector.
The United States, China, the European Union, Japan, India and Canada are all expanding national programs tied to quantum computing, semiconductor manufacturing and post-quantum cybersecurity. India’s National Quantum Mission carries a planned investment of roughly $1 billion, while China has significantly increased state-backed spending on semiconductors, AI and quantum technologies (Quantum Insider).
At the same time, rising AI workloads are increasing demand for advanced packaging, photonics and high-performance chips, further strengthening the importance of semiconductor leaders such as ASML Holding ASML, Taiwan Semiconductor Manufacturing Company TSM and Applied Materials AMAT within the evolving quantum-computing space.
Semiconductor and Quantum Picks with Strong Upside
ASX: It is increasingly emerging as a strategic beneficiary of the global AI and advanced-computing boom due to its leadership in semiconductor packaging and testing. As AI accelerators and high-performance chips become more complex, demand for advanced packaging technologies such as 2.5D and chiplet integration continues to rise. Recent industry developments, including aggressive investments across Taiwan’s advanced packaging ecosystem, highlight the growing importance of backend semiconductor infrastructure in enabling next-generation AI and quantum workloads.
This Zacks Rank #1 (Strong Buy) semiconductor stock has a Growth Score of A. Our research shows that stocks with a Growth Style Score of A or B, when combined with a Zacks Rank #1, 2 (Buy) or 3 (Hold), offer the best upside potential. Based on short-term price targets offered by two analysts, the average price target for ASE Technology represents an increase of 18.48% from the last closing price. You can see the complete list of today’s Zacks #1 Rank stocks here.
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IONQ: In April 2026, this pureplay quantum computing company achieved a major milestone by successfully photonically interconnecting two quantum systems, a key step toward scalable networked quantum computing. IonQ was also selected for DARPA’s HARQ program focused on modular quantum architectures and recently raised its 2026 revenue guidance following strong demand growth. The company’s acquisitions in quantum networking and secure communications further reinforce its strategy to build a full-stack quantum ecosystem spanning computing, networking, sensing and cybersecurity.
The stock carries a Zacks Rank #3. The Zacks Consensus Estimate for the company’s second-quarter 2026 bottom line is pegged at a loss of 24 cents per share, implying 65.7% projected growth year over year. Based on short-term price targets offered by 12 analysts, the average price target represents an increase of 39.8% from the last closing price.
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Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners UpASML Holding N.V. (ASML) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report
IonQ, Inc. (IONQ) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
