Forget Pure-Play Quantum Computing Stocks. These 2 Beaten-Down Giants May Be the Smarter Bet
Key Points
Quantum computing pure plays are generally highly-valued, pre-revenue companies.
IBM is arguably the top quantum computing developer so far, and there's a lot to like about the stock.
Zscaler aims to be at the forefront of quantum-era cybersecurity challenges.
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Quantum computing could be years away from commercial viability, but there are plenty of exciting ways you could invest in it already. As one of the most potentially transformative technology trends of our time, it's not a surprise that many investors want exposure to quantum computing in their portfolios.
One problem is that some of the most popular quantum computing pure plays are not only pre-revenue businesses but are also trading for high valuations for businesses that aren't expected to have a viable commercial product for several years.
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On the other hand, there are some excellent businesses with impressive quantum computing potential that also have multi-billion dollar revenue streams and are current leaders in their industries. Here are two in particular that could be great ways to set your portfolio up for the future of quantum computing right now.
Image source: Getty Images.
This is not the IBM of yesterday
IBM (NYSE: IBM) is often mistakenly thought of as a legacy technology company, but the reality is that it has done a fantastic job of pivoting to an AI-focused product strategy.
IBM also has quite possibly the most impressive large-scale quantum computing program of any company. It not only has an ambitious roadmap to develop the next generation of computing technology, but it has already established an impressive track record of achieving key objectives ahead of schedule. It has already developed some of the most advanced quantum processors in the world, and aims to produce a large-scale, fault-tolerant quantum computer by the end of the decade.
Recent results have been impressive. IBM's revenue for the fourth quarter of 2025 grew 12% year-over-year and handily beat expectations. Its AI book of business reached $12.5 billion, up from $5 billion just one year ago. Plus, IBM is an absolute cash machine, with nearly $15 billion in free cash flow last year, giving it the financial flexibility to maintain its innovative edge.
IBM has been beaten down, mainly due to AI disruption fears that new models could undermine the company's legacy consulting business. The stock is down by more than 20% so far in 2026, and now could be a great time for long-term investors to buy.
Quantum computing has benefits and threats
To be perfectly clear, quantum computing has the potential to do tremendous good for society. But it also has the potential to create problems, especially in cybersecurity. In simple terms, modern encryption methods considered impervious to today's computing technology could become vulnerable once quantum computers reach their full potential.
Zscaler (NASDAQ: ZS) is a company that aims to be on the forefront of post-quantum cryptography (PQC). It is already helping its customers assess their exposure to quantum threats and has plans in motion to eventually deliver full end-to-end PQC enforcement through its Zero Trust platform.
There are widespread fears that advances in AI coding will disrupt Zscaler's competitive advantage, but, to put it mildly, I don't buy the narrative that it will be a victim of the "SaaSpocalypse." Zscaler is a trusted and essential component of its customers' businesses, and continues to grow rapidly, with 26% year-over-year revenue growth in its most recent quarter and excellent profit margins. With the stock trading for nearly 60% below its 52-week high, it could be a great time to invest while AI disruption fears are elevated.
Quantum and a lot more
Both of these could be excellent ways to benefit from the evolution of quantum computing technology, but it's equally important to point out that the investment thesis for each company isn't fully reliant on it. In other words, if it takes a few additional years for quantum computing to reach mainstream viability, both IBM and Zscaler have several other ways they could win in the meantime.
So, if you're looking for quantum computing exposure in your portfolio and want to take advantage of the recent downturn in software and AI-adjacent technology companies, these could certainly be worth a closer look.
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Matt Frankel, CFP has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines and Zscaler. The Motley Fool has a disclosure policy.
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