Quantum computing isn't as big an investment theme as artificial intelligence (AI). AI is currently the market's fixation, and for good reason, as that's where a ton of investment dollars from companies around the globe are going.
However, within a few years, quantum computing could greatly accelerate artificial intelligence computing, and there are a handful of companies that could cash in on this exciting technology. If you want to increase your risk tolerance in exchange for a greater reward, I think investing in these companies offers a compelling trade-off.
Image source: Getty Images.
IonQ
IonQ (IONQ 5.29%) is one of the most popular quantum computing stocks, likely stemming from its claim of being the first quantum computing-focused company to debut on the public markets. However, its technology is also compelling and could have massive implications in the AI realm.
Instead of superconducting quantum computing, which most competitors in this space use, IonQ takes a different approach. It utilizes trapped-ion quantum computing, which has two primary benefits.
First, trapped-ion quantum computing doesn't need near absolute-zero temperatures; it can be done at room temp. This is a massive advantage, as it isn't as expensive to operate, and specialized facilities do not need to be developed.
Second, trapped-ion quantum computers provide far greater accuracy than their superconducting counterparts. IonQ currently holds two world records for quantum computing accuracy. IonQ's accuracy comes at the cost of computing speed, but for early adopters of the technology, having accurate calculations instead of high speed is more desirable.
IonQ believes that quantum computing can significantly boost AI capabilities. Recently, IonQ announced that its Tempo system has reached the #AQ 64 performance milestone. This indicates that its computing space for quantum calculations has doubled from the last milestone it achieved nine months ago. This advancement further increases IonQ's potential to become viable in boosting AI, as a hybrid system can significantly reduce energy consumption while running these models.
Time will tell if IonQ's solution is commercially viable, but all signs point toward it becoming a massive winner in the coming years from the hybrid quantum computing industry.
Alphabet
Alphabet (GOOG -0.04%) (GOOGL -0.16%) is also developing a quantum computing chip. Its Willow quantum computing chip has delivered impressive results, and Alphabet has nearly unlimited resources to invest in this technology.
Alphabet understands the benefits of a hybrid quantum computing system tasked with AI, and it's aiming to develop its own technology so it doesn't need to go out and purchase computing units from external suppliers like it has to with AI.
If Alphabet can develop a viable quantum computing solution, its generative AI model, Gemini, would immediately reap the benefits of boosted computing power. This would likely propel Gemini to the top of the leaderboard in best-performing AI models, making Alphabet a must-invest stock if it does.
Additionally, Alphabet would likely offer its quantum computing abilities through its cloud computing service, Google Cloud. This would allow anyone to rent quantum computing capabilities from Alphabet, leading to a huge demand for the service. Furthermore, because it wouldn't need to pay a middleman to outfit it with computing equipment, this would be highly profitable growth, especially if there are no other commercially viable quantum computing options available. Even if Alphabet's quantum computing investments flop, it will still be able to purchase quantum computing units from a company like IonQ for use in its Google Cloud servers. If there's a huge demand for quantum computing power, Google Cloud will reap the benefits of the technology through this service regardless of how its internal developments pan out.
Should Alphabet develop a viable quantum computing solution, it would have two major benefits and would likely send the stock soaring. This could propel Alphabet to become one of the world's largest companies, making it a no-brainer buy right now.
