We recently compiled a list of the 10 Best Quantum Computing Stocks to Buy for 2025. In this article, we are going to take a look at where Alphabet Inc. (NASDAQ:GOOGL) stands against the other quantum computing stocks.
Quantum computing is a revolutionary technology that integrates quantum physics properties into a computer. This technology has the potential to revolutionize industries by solving complex issues at a rapid pace as compared to traditional computing methods. Notably, businesses across sectors, such as finance, healthcare, and transportation, continue to explore several benefits of quantum computing in a bid to have a competitive edge and fuel innovation.
Trends To Watch Out For in 2025
Heading into 2025, government aid, strategic initiatives, and legislative support for research are some of the key trends likely to fuel growth. In July 2024, US Senators John Hickenlooper and Michael Bennet highlighted the Department of Commerce’s announcement that Colorado’s Elevate Quantum was given $40.5 million in federal funding to build the nation’s leading quantum ecosystem.
Hickenlooper added that Colorado is regarded as the Silicon Valley of the quantum era, and Elevate Quantum is expected to lead. Hickenlooper went on to say that Quantum is well-placed to revolutionize medical drug discovery, supercharge AI, strengthen US cybersecurity, and support the transition to clean energy.
Also, in late November 2024, The Senate advanced the Department of Energy (DOE) Quantum Leadership Act of 2024, proposing $2.5 billion over 5 years to fuel US quantum R&D. Notably, the bipartisan bill emphasizes quantum networking, domestic manufacturing, and public-private partnerships to ramp up quantum innovation.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Industries Likely to Benefit
The Wall Street Journal reported that quantum computers possess the potential to reduce global carbon emissions by 7 gigatons by 2035 and 150 gigatons by the upcoming 30 years, while adding up to $1.3 trillion in value to key transition industries, as per McKinsey. The rapid computational power it promises is expected to revolutionize batteries for electrification, transform carbon-heavy industrial operations, establish cleaner methods for agriculture, and help reimagine fuel’s future.
Grand View Research highlighted that the growth in the quantum computing market in the US should be driven by higher government and private sector investment in quantum technologies. This growth is likely to stem from the potential of quantum computing to revolutionize industries including materials science, drug discovery, and finance.
Our Methodology
To list the 10 Best Quantum Computing Stocks to Buy for 2025, we conducted extensive research and sifted through several online rankings. After getting the initial list of 12-15 stocks, we chose the ones that were popular among hedge funds and that analysts saw upside to. Finally, the stocks are arranged in ascending order of their hedge fund sentiment, as of Q3 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A user’s hands typing a search query into a Google Search box, emphasizing the company’s search capabilities.
Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOGL) announced a significant advancement in quantum computing with the unveiling of its next-generation chip called ‘Willow’. Willow reflects an improved error correction, which is a critical challenge in quantum computing. With the effective management of errors, the chip ensures more reliable and scalable quantum computations. In benchmark tests, Willow was able to complete computations in under 5 minutes that would have taken most powerful classical supercomputers ~10 septillion years. After the announcement of Willow, Alphabet Inc. (NASDAQ:GOOGL)’s stock saw a strong increase (up by ~12.5% in just a month) reflecting investor optimism about the company’s technological advancements and their potential market implications.
Alphabet Inc. (NASDAQ:GOOGL)’s Chief Executive stated that Willow is an important step in the company’s journey to build a useful quantum computer with practical applications across areas such as drug discovery, fusion energy, battery design, and more. Willow can reduce errors exponentially as Alphabet Inc. (NASDAQ:GOOGL) scales up using more qubits. This cracks a key challenge in quantum error correction that the field has pursued for ~30 years.
Much of the optimism about Alphabet Inc. (NASDAQ:GOOGL) stems from the monetization opportunities that become available with the success of Willow. By offering Quantum Computing as a Service (QCaaS) via Google Cloud, the company can monetize its quantum technology through subscription-based models, creating a recurring revenue stream. Furthermore, Willow’s computational power can significantly ramp up drug discovery and development, bringing in pharma companies to collaborate with or rely on the company’s quantum solutions.
Overall GOOGL ranks 2nd on our list of the best quantum computing stocks to buy for 2025. While we acknowledge the potential of GOOGL as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than GOOGL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.