Want to Invest in Quantum Computing? 3 Stocks That Are Great Buys Right Now

Quantum computing will change the world. The technology promises to solve computing problems that are way beyond the powers of today's digital chips. The nuanced approach to mathematics can draw conclusions in shades of gray rather than black-and-white ones and zeroes. As such, quantum computing is pretty much guaranteed to disrupt everything from cryptography and genetic engineering to financial planning and weather forecasts.

But the technology is not ready to hit the mainstream limelight. It's not even close. Researchers in this field are battling issues such as noise reduction, error correction, and stability of the qubit computing units. Nvidia CEO Jensen Huang recently said that useful quantum computers are about 20 years away -- and he should know, because Nvidia is a leading developer of digital-to-quantum system communications.

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So I'm not ready to pick winners among the true quantum computing specialists quite yet. Names like IonQ (NYSE: IONQ) and D-Wave Quantum Systems (NYSE: QBTS) might become system-building giants in the far future, but their research could also hit a dead end until they run out of cash. Honestly, I'm afraid that the bearish conclusion is more likely for all of them at this point.

But I see quantum computing as a great long-term business for some of today's most celebrated tech giants. These behemoths can pour more money and engineering effort into their quantum computing exploration than any of the single-issue specialists ever could, treating quantum physics as a minor side gig until the industry emerges as a big-time money maker.

I already mentioned Nvidia, but that stock doesn't stand out as a great buy right now. Call me back if the stock gets significantly cheaper, or if the company's artificial intelligence (AI) dominance continues over the next few years. Until then, I'm more interested in good old International Business Machines (NYSE: IBM), e-commerce veteran Amazon (NASDAQ: AMZN), and Google parent company Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Alphabet is leading the quantum computing race so far

You already know Alphabet's core business. Brands like Google, YouTube, and Android are household names and cash machines. The company collected a staggering $350 billion of top-line revenue last year, invested $49.3 billion in research and development, and held on to $72.8 billion of free cash flow. Alphabet is one of my favorite stocks to buy, in this or any other economy. So let's focus on the company's quantum computing efforts instead.

Alphabet was the company that lit a fire under quantum computing stocks last year. You know the Willow chip, which completed a quantum computing benchmark in five minutes that would take longer than the life of the universe to solve with a digital supercomputer? Yeah, that chip was designed by Alphabet's Google Quantum AI team. The company is already a thought leader in modern quantum computing, and I see no reason why that should change over time.

Again, Alphabet spends more on R&D than most companies see in annual revenue. Even if quantum computing is basically a hobby so far, Alphabet has diverted a game-changing amount of assets to the effort. IonQ and D-Wave didn't spark the quantum computing investor craze of 2024. Google did, and will probably do it again in a few years. I won't mind holding a few Alphabet shares as the quantum computing industry evolves.

IBM is a quantum research powerhouse

Alphabet isn't the only heavy-hitting researcher in the quantum computing space. I don't need to introduce you to IBM, either -- the technology titan has been around for more than a century, driving many world-changing innovations along the way. From mainframe computers and PC systems to important AI concepts and the tech platform behind social security, Big Blue has done it all.

IBM's innovative spirit also extends to the quantum computing world, of course. Its massive patent portfolio covers issues like reading quantum states with a video camera, using audio pulses to manage qubit collisions, and code compilers for quantum-system programs. The company makes its own quantum chips, offers access to them in cloud computing services, and is about as likely to hit the next technology milestone as Alphabet.

Meanwhile, IBM's AI business is making a delayed splash. Others were quick to trot out consumer-friendly AI tools when the ChatGPT boom started. Big Blue took a different path, making sure that its WatsonX generative AI system was ready for enterprise-class business use before jumping in. The strategy is driving strong order growth nowadays. WatsonX's order book expanded from $3 billion in Q3 2024 to $5 billion in the next quarter. That growth engine should keep us IBM shareholders happy for years to come, as the quantum computing opportunity matures.

Amazon's quantum computing products will surprise you

Finally, you probably don't think of Amazon as a quantum computing stock. The world-leading e-commerce pioneer also runs the largest cloud computing service on the planet, along with a growing collection of shipping services and business infrastructure tools. But yes, Amazon is also designing its own range of quantum computing chips, ready for commercial exposure through the Amazon Braket service.

Amazon's pockets are about as deep as Alphabet's, with $638 billion of 2024 revenue generating $36.2 billion of free cash flow profits. The company doesn't exactly report R&D expenses, but the technology and infrastructure line on last year's annual report stood at $88.5 billion. As long as Amazon's leaders see long-term business value in the quantum computing market, I expect the company to keep building a fantastic foundation for this effort.

These are three of the top names in quantum computing, today and for the long haul. All three stocks are also trading more than 15% below their recent all-time highs as of this writing on April 10. Amazon's stock trades at reasonable valuation ratios, while IBM and Alphabet look downright cheap. This is a great time to invest in the quantum computers leaders of the future, as long as you're sticking to the true giants of this emerging market.

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Amazon, International Business Machines, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, International Business Machines, and Nvidia. The Motley Fool has a disclosure policy.