Are Quantum Computing Stocks Becoming the Next AI?

Investors flocked to artificial intelligence (AI) stocks last year, and they drove market gains, leading the S&P 500, the Nasdaq Composite, and the Dow Jones Industrial Average higher. Today, these players continue to advance, and they're joined by certain stocks in the high-potential field of quantum computing.

In fact, quantum computing stocks might be following in the footsteps of AI stocks, becoming the next industry to lead market gains, and here's why.

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Why AI became so popular

First, though, it's important to understand why AI grabbed the world's attention in recent years. This technology has the potential to revolutionize the way things are done -- from business to our daily lives -- by introducing more efficiency into processes. AI also can help companies develop new and better products -- from therapeutics to autonomous vehicles -- faster. So, AI can be a gamechanger, and experts have even likened the technology to the development of the steam engine, or in more recent days, the internet.

Companies powering AI, such as AI chip leader Nvidia and networking giant Broadcom have seen their shares surge -- and so have companies offering AI infrastructure, like Amazon, or those developing AI platforms and applying them to their businesses. A good example of that is Meta Platforms, which trained AI model Llama, a tool that powers its popular AI assistant.

Today, AI continues to be an interesting growth story, and there are plenty of chapters left in this exciting book. But quantum computing may be even earlier in its growth story -- and also promises to become a game changer. Investors generally like getting in on an investing theme early to fully benefit as it develops. So, what exactly is quantum computing? It's a type of computing that relies on the principles of quantum mechanics, or how subatomic particles interact.

In quantum computing, the computing is done by qubits rather than the bits used in traditional computing. Their ability to process data as a zero, a 1, or both at the same time, and the combining of many of these qubits allows for the solving of problems that have been impossible for classical computers.

D-Wave's record quarter

Several pure play companies are publicly traded and are working toward making this process useful for real world problems. In fact, D-Wave Quantum (NYSE: QBTS) recently launched its Advantage2 quantum computer to be used in fields such as business optimization or AI. D-Wave, thanks to sales of its Advantage system and services, in the recent quarter said revenue soared 500% to a record $15 million -- the increase in revenue shows customers are interested in such technology, and the revenue level shows there still is plenty of room for gains as this technology develops.

Though D-Wave and others such as Rigetti Computing and IonQ are generating revenue from certain systems and services, quantum computers haven't yet even come close to reaching their full potential. The good news here is that means, if research and development goes well, revenue could explode higher down the road -- making now an excellent time to get in on these players.

The big difference between AI and quantum computing today is AI is more regularly and easily applied to real world problems, while quantum has significant challenges to conquer. For example, qubits are fragile and can only hold information for a short period of time. Other challenges are error rates and difficulty scaling quantum systems. All of this makes quantum computing stocks higher risk right now than AI stocks -- but, considering the promise of quantum computing, investing in these stocks could lead to enormous returns over time if the technology is successful.

Should you invest in quantum computing stocks?

What does this mean for you as an investor? If you're an aggressive investor looking for the next big thing in technology, you may consider buying shares of some of the leading pure play companies such as the players I've mentioned above. If you're cautious but still interested in the field, you could opt for well-established tech giants such as Alphabet or Microsoft that also have quantum computing programs.

It's still too early to say how successful quantum computing will be over time, but companies have made progress recently, and potential is strong. That means quantum computing stocks could become the AI stocks of 2025 -- and help lead the overall market higher.

Should you invest $1,000 in D-Wave Quantum right now?

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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. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.