Better Quantum Computing Stock: Alphabet vs. IonQ

Quantum computing has a huge market opportunity that's quickly approaching. Many in the industry now project 2029 as the year viable quantum computing technology arrives, which isn't all that far away. Companies of all sizes are vying for viable quantum computing technology, including some of the largest in the world. At the same time, several upstarts are attempting to capture market share, and this new technology has the potential to create several incredible new companies.

One of the brightest quantum computing upstarts is IonQ (NYSE: IONQ). IonQ is taking a different approach to quantum computing than its peers, and it's looking very promising. Another major competitor is Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the world's third-largest company.

These two are completely different sizes and have different return levels, but which is the better investment?

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There are multiple pathways for quantum computing

Quantum computing is more of a concept than an established technique. The general idea is to use a particle's movements to perform calculations, but how that particle is controlled varies from company to company. Companies are trying different approaches to best control particles for calculations, ranging from superconducting computing (like Alphabet) to trapped ion (IonQ). Each approach has its own strengths and weaknesses, but it ultimately boils down to two factors: speed and accuracy.

Alphabet is taking an approach that optimizes speed over accuracy. The idea here is that, eventually, the technology will become accurate enough that faster processing speeds will be more attractive to clients.

IonQ's approach optimizes for accuracy and is working on processing speed by adding more qubits, the quantum computing equivalent of bits. While its approach may be slower, sheer size can make up for it.

Nobody knows which technique will ultimately win, so investing in companies with a variety of approaches makes the most sense. However, one company has much more to gain than the other.

IonQ is an all-or-nothing bet

With IonQ's only business being quantum computing, it must produce a viable product or go bankrupt. While that life-or-death comparison may seem a bit stark, it's the reality for an upstart like IonQ. Fortunately, it has several partners and is nearing production of its 256-qubit system, which could be the first viable early-stage quantum computing product ever released.

If that product sees strong adoption, the market may get on board with IonQ's prospects and send its stock skyrocketing. Since it's a relatively small $16 billion company, it wouldn't take much of a boost to send its stock skyrocketing. It could deliver multi-bagger returns over the long run if it can take significant market share.

Alphabet is different. If its quantum computing product lineup doesn't pan out and goes bust, the stock really wouldn't be affected. It would still proceed with its normal plan to produce incredible AI products and dominate the online search industry. While it may have missed an opportunity to provide leading quantum computing units for its cloud computing business, it will still be a strong investment.

Even if it does develop a viable quantum computing product, there are questions as to how much it will actually affect Alphabet's financial picture. During the second quarter, Alphabet generated nearly $120 billion in revenue.

An additional $1 billion in revenue doesn't really move the needle for Alphabet. However, it would mean the world to IonQ and its shareholders.

So, if you're looking for ultimate upside, but with high risk, IonQ is the better quantum computing stock pick. However, if you're looking for guaranteed positive returns and little risk with some quantum computing exposure, Alphabet is the better stock pick of the two.

Keithen Drury has positions in Alphabet and IonQ. The Motley Fool has positions in and recommends Alphabet and IonQ. The Motley Fool has a disclosure policy.