While not as widespread as generative artificial intelligence (AI), a handful of quantum computing stocks have absolutely exploded over the past year. Perhaps the rise of AI has led investors to believe quantum computing can be commercialized sooner than people think, or perhaps these quantum computing companies have started to show some real breakthroughs.
Either way, something is definitely amiss. D-Wave Quantum is up more than 1,700% over the last year, while IonQ has blasted nearly 450% higher. Despite the moonshots, billionaire investors have been turning their attention to a larger quantum computing stock instead.
Billionaires are thinking bigger
D-Wave and IonQ appear to have tremendous potential in the complex field of quantum computing, but investors should remember that if there's a groundbreaking innovation out there in the tech world, you know that companies in the "Magnificent Seven" are likely going to be involved.
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Alphabet (GOOGL 0.73%) (GOOG 0.61%), the parent company of Google and YouTube, is one Mag 7 company making progress in quantum computing. In 2023, Google became the first company to perform a computational task better than even the speediest of supercomputers.
Part of the world-beating performance rested on an important new feature. Google's team of quantum researchers demonstrated that it is possible to reduce errors in computational functions by increasing the number of qubits. That's a huge breakthrough, since more qubits usually introduce more errors.
Qubits are the fundamental unit of quantum computing, like bits are the basic unit of digital computing. Bits can be a 0 or 1, but qubits can essentially be in more advanced states that can take on 0 and 1 at the same time, allowing them to perform much more complex calculations than your standard computers.
Adding more qubits makes the quantum system more powerful, but also increases the amount of data errors. The Willow chip's exponential error correction could lead the way towards stable quantum computers with reliable data flows -- at a much larger scale than today's toy-like systems.
There's still a ways to go, but many experts believe quantum computers will be able to solve extremely difficult computations in a much more efficient manner than even the smartest of humans, while performing complex computing tasks that could revolutionize most industries, similar to the potential of AI. Google is currently in the process of building a 100-qubit quantum computer,
Billionaires have certainly taken notice of the company. In the first quarter of 2025, Millennium Management, run by billionaire Israel Englander, boosted its equity long position in Alphabet by 151%.
Keep in mind that Millennium runs a multi-strategy hedge fund, sometimes called a "pod shop," where portfolio managers are hired by the company and use firm capital, but have lots of autonomy over their investment decisions. This is simply to make people aware that Englander may not have pressed the buy button on Alphabet himself, although he certainly could have had a say in the decision.
Other billionaires like Ken Griffin, who runs multi-strategy hedge fund Citadel Advisers, increased his stake in Alphabet by about 10%, while billionaire David Tepper's fund, Appaloosa Management, also increased its position in the large conglomerate by 7%.
Beyond quantum, is Alphabet's stock a buy?
Due to Alphabet's size and all of its businesses with strong potential, these billionaires are likely buying Alphabet for more than just the company's quantum computing division. Sure, quantum computing could be a massive new business, but most quantum computing companies aren't generating significant revenue right now because the computers haven't really been commercialized yet.
Rather, investors may believe that Alphabet is on sale, with the stock currently trading at about 19 times forward earnings. The company has certainly run into hiccups. The Department of Justice successfully sued Alphabet for monopolistic digital advertising practices, and have asked a federal judge to make the company sell its Chrome search business. There are also broader questions about whether AI chatbots like ChatGPT and Perplexity will take over search, a business that makes up over half of Alphabet's revenue.
Still, Alphabet owns many fast-growing businesses like YouTube and Google Cloud, and has also rolled out Google summaries through its Gemini division, which offers users an AI chatbot-like experience at the top of most search queries. Then, of course, you have to think about all the other up-and-coming businesses at Alphabet such as quantum computing, chip-building, and autonomous driving through Waymo.
While Alphabet faces challenges, I suspect the company can navigate the choppy waters and emerge successfully on the other side.
