UBS names IBM, Alphabet, and Microsoft as quantum leaders

IBM, Alphabet, and Microsoft sit at the top of UBS’s latest ranking of companies pushing toward practical quantum computing. The call comes at a time when tech stocks already trade at rich levels, and investors are hunting for the next corner that could shape what comes next.

UBS says this part of the market stands out because it targets problems current machines cannot handle at scale.

The bank says interest has picked up over the past year as IBM, Alphabet, and Microsoft all stepped up efforts to build systems that work outside research labs. Smaller names have also drawn attention.

IonQ is the clearest example. The stock jumped hard over the past 12 months and then dropped just as fast. UBS says that pattern shows how early and unstable this market still is.

UBS lays out where computing power could hit first

UBS analyst Madeleine Jenkins led a team of 11 analysts who put together a 103-page report for clients. The group describes the market as fragmented and immature. They still see three clear areas where the technology could matter most.

Those areas are molecular simulation, optimization and AI, and cryptography. UBS says these use cases explain why Wall Street is paying closer attention now.

The analysts wrote that progress has been slow and full of setbacks, but recent results stand out. They say the field is starting to show real technical gains.

The report states that by using the behavior of very small particles, quantum computing could deliver huge processing power at far lower cost than today’s systems. UBS estimates that full advantage could arrive in the 2030s.

At that stage, matching the output with standard hardware would need the equivalent of 10²¹ GPUs. UBS says building the new systems could cost only tens of millions of dollars.

The report explains that there are several ways to build a qubit, which is the basic unit of quantum information.

Right now, two approaches lead the pack. Those are superconducting qubits and trapped-ion qubits. Jenkins says these two paths narrow leadership to a small group of companies. Alphabet and IBM focus on superconducting designs. Microsoft and Amazon offer mixed setups through cloud platforms.

Big tech strategies meet volatile pure plays

UBS calls Google, which sits under Alphabet, a pioneer in quantum software and error correction. The report points to the Willow chip released in December 2024.

UBS says Willow reduced errors as more qubits were added. It also ran a standard benchmark task in under five minutes. UBS says a top classical supercomputer would need about 10 septillion years to do the same job.

Microsoft and Amazon take broader paths. Microsoft works with smaller hardware specialists such as IonQ while also researching a topological design. UBS says this design could lead to a faster and more stable qubit if it works as planned.

Amazon also supports several approaches through its cloud services. UBS rates Microsoft and Amazon as buys. Alphabet carries a neutral rating. Jenkins says the outcome depends on which qubit design succeeds first.

UBS also highlights public companies that focus only on this space. Those include IonQ, D-Wave Quantum, and Rigetti Computing. These stocks have shown sharp gains followed by steep drops. IonQ is the largest of the group. Its market value has topped $17 billion.

The stock rose 72% over the past year through Wednesday and then fell 34% since mid-October. FactSet data show IonQ’s adjusted beta at 2.37. UBS says that means the stock moves more than twice as much as the broader market.

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