Quantum computing has been an up-and-down investment theme over the past few months. The rage kicked off when Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) announced a breakthrough with its Willow quantum computing chip, and any stock associated with quantum computing rose on the news of the announcement.
Then, Nvidia CEO Jensen Huang halted the momentum with his statement that "useful quantum computing" is likely 15 years away. That's too long of a time frame for most investors, so the stocks sold off because of it. Meta Platforms CEO Mark Zuckerberg also backed up Huang's comments, as he believes we are a long way off, too.
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However, Nvidia seemed to regret these comments, as it announced a quantum computing day at its annual conference, GTC 2025, in March. So, with quantum computing back in the spotlight, what is the best quantum computing stock for 2025?
There are multiple competitors in the quantum computing space. There are some big legacy names like Alphabet, IBM, and, of course, Nvidia. But there are also pure plays, like IonQ, Rigetti Computing, Quantum Computing, and D-Wave Quantum.
These companies are legitimate quantum computing investments, but each comes with its own risk levels. As we've seen this year, pure-play quantum computing stocks will be significantly more volatile. Just look at the price chart of IonQ over the past three months.
However, if one of these stocks works out, there's also significantly more room for upside. On the flip side, none of these pure plays are profitable and require external funding from clients to perform the research necessary to develop quantum computing.
Moving to some of the larger competitors, I find these stocks far more attractive, as they are using profits from an established business to fund research in an emerging field. By investing in these stocks, you'll benefit from a successful business with the upside of quantum computing. If it takes 15 years for useful quantum computing to emerge, as Huang and Zuckerberg have suggested, then your investment dollars won't have been wasted, as companies like Alphabet and Nvidia will still be successful.
Even Alphabet, whose Google Willow chip kicked off the quantum computing investment hype, still believes we're a ways away from useful quantum computing. When its Willow chip completed a benchmark computation that would take 10 septillion years (10 with 25 trailing zeros) for the world's fastest supercomputer to process, many thought that quantum computing was near.
However, Google included this useful chart in the report indicating where we're at in the quantum computing development cycle.
Clearly, this is a very difficult computational task, but it has no usefulness. As a result, I'm still inclined to believe we're a ways off from commercially relevant quantum computing, but it could be quicker than Huang's 15-year projection. With that in mind, I think there's one stock that stands out above the rest to ride the quantum computing wave: Alphabet.
One of the biggest problems with quantum computing is that it's prone to calculation errors. Every company involved with quantum computing is trying to solve this issue, and Alphabet seems to have done it with its Willow chip, as its gate error is incredibly low.
The fact that Alphabet has a strong base business with advertising through its Google platform and has established a leadership position in the AI arms race makes it a no-brainer buy. Alphabet doesn't need quantum computing to work out for it to be successful, but if it does, the stock could be an unbelievable winner.
There's nothing wrong with pure plays in quantum computing, but investing in them involves significantly more risk than I want to take on. That's why Alphabet remains my top pick in this space.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keithen Drury has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet, International Business Machines, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.