Although artificial intelligence (AI) has been Wall Street's hottest multiyear trend, it took a backseat to an even more-hyped technology in 2025: quantum computing.
Quantum computing pure-play stocks IonQ (IONQ +7.07%), Rigetti Computing (RGTI +8.71%), D-Wave Quantum (QBTS +11.00%), and Quantum Computing Inc. (QUBT +8.94%) have respectively surged by as much as 810% over the trailing year, as of the closing bell on Dec. 5.
With an addressable opportunity of up to $850 billion for quantum computing by 2040, according to an estimate from Boston Consulting Group, it's not hard to understand why this technology has investors so excited. But it's not just everyday investors angling for their piece of the quantum computing pie.
Image source: Getty Images.
In mid-November, institutional investors with at least $100 million in assets under management filed Form 13F with the Securities and Exchange Commission. This filing details which stocks Wall Street's savviest money managers bought and sold in the latest quarter.
According to 13Fs, one brand-name quantum computing stock was purchased by several billionaires during the September-ended quarter -- even Berkshire Hathaway's (BRK.A 0.15%)(BRK.B 0.37%) famous billionaire boss, Warren Buffett. However, IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. aren't the stock in question that billionaires want to own for 2026.
Pure-play quantum computing stocks come with serious risks
The excitement surrounding quantum computing, which utilizes specialized computers to perform rapid, simultaneous calculations that are considerably faster than the world's quickest supercomputers, boils down to its practical applications. Quantum computers can be used to refine the development of drugs and clinical trials, to improve the safety of cybersecurity platforms, and to speed up the learning process of AI algorithms, among other touted real-world use cases.
But one of the biggest issues with next-big-thing technologies that investors always overlook is their need for time to mature and evolve. Since the advent of the internet 30 years ago, every game-changing technology has endured a bubble-bursting event early in its existence. These bubbles have been driven by investors overestimating the early adoption and optimization of new technologies.
NYSE: IONQ
Key Data Points
Currently, quantum computing solutions are still in the very early stages of commercialization. It's likely to take years before quantum computers become a more cost-effective and efficient option for practical problem-solving, compared to classical computers. In other words, the hallmarks of a bubble are firmly in place.
Furthermore, IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing Inc. are all losing money and burning through a significant amount of capital as they ramp up their commercialization efforts and continue to innovate. With losses and cash burn expected to persist for the foreseeable future, all four companies are likely to raise cash by diluting their existing shareholders.
Quantum computing pure-play stock valuations aren't attractive, either. Although it can be challenging to value early stage businesses on the leading edge of high-growth trends, the price-to-sales (P/S) ratio tends to be a particularly accurate tool.
Before the internet bubble popped, many of its leading businesses peaked at P/S ratios of around 30 to 40. If IonQ, Rigetti, D-Wave, and Quantum Computing Inc. all grew their sales annually by triple-digits through 2028, they'd still be firmly above this line in the sand that's historically helped identify stock market bubbles.
The final reason billionaires have likely kept their distance from these pure-play stocks is that their first-mover advantage may not be sustainable.
Image source: Getty Images.
Billionaire money managers want to own this quantum computing stock for 2026
Although 13Fs show that IonQ, Rigetti, D-Wave, and Quantum Computing Inc. didn't make the cut with Wall Street's brightest asset managers, one quantum computing stock was broadly added by several billionaire investors: Google parent Alphabet (GOOGL +10.06%) (GOOG +10.00%).
During the third quarter, we witnessed the following purchases:
- Billionaire Philippe Laffont of Coatue Management added 5,210,434 shares of Alphabet's Class A shares (GOOGL) and opened a 2,091,574-share position in its Class C shares (GOOG).
- Billionaire Warren Buffett of Berkshire Hathaway oversaw the purchase of 17,846,142 shares of Alphabet's Class A shares.
- Billionaire Stanley Druckenmiller of Duquesne Family Office opened a new position consisting of 102,200 Class A shares.
Additionally, Alphabet is the second-largest holding for Baupost Group, which is run by billionaire Seth Klarman, and is the third-largest holding (collective of both classes of shares) for Tiger Global Management (run by Chase Coleman), Pershing Square Capital Management (overseen by Bill Ackman), and Fundsmith (run by Terry Smith), respectively. Suffice it to say, Alphabet is the No. 1 quantum computing stock to own for 2026, according to the portfolios of billionaire investors.
Admittedly, the lure of Alphabet extends well beyond its quantum computing ties, which I'll address in a moment.
NASDAQ: GOOGL
Key Data Points
For instance, Google has accounted for between 89% and 93% of worldwide internet search share over the trailing decade, according to data from GlobalStats. This virtual monopoly in internet search ensures premium ad-pricing power and allows Alphabet to take advantage of lengthy periods of economic expansion (ad spending is highly cyclical).
To build on the point above, Alphabet is also the parent of streaming service YouTube, which is the second most-visited website in the world, behind only Google. This further enhances Alphabet's ad-pricing power.
Alphabet's most significant growth driver in the second half of this decade appears to be its cloud infrastructure service platform, Google Cloud. Currently the world's No. 3 cloud infrastructure service provider, in terms of total spend, Google Cloud is seeing its year-over-year sales growth accelerate above 30% as generative AI and large language model applications are added for its clients.
All of these puzzle pieces demonstrate that Alphabet has a solid foundation and is capable of generating bountiful operating cash flow in most economic climates. Meanwhile, IonQ, Rigetti, D-Wave, and Quantum Computing Inc. lack profitable operating segments to fall back on.
Alphabet's quantum computing tie-in is related to its development of a quantum processing unit, known as Willow. The company unveiled Willow in December 2024 and, more recently, announced that it had successfully run a quantum algorithm that was approximately 13,000 times faster than the world's quickest supercomputer.
Alphabet closed out September with $98.5 billion in cash, cash equivalents, and marketable securities, and has generated over $112 billion in cash flow from its operating activities in just the first nine months of 2025. It has plenty of capital to throw at high-growth initiatives, such as quantum computing hardware.
Billionaires wisely recognize that Alphabet has the trajectory to become a key player in quantum computing, and also possesses several steadily growing operating segments that can help the company thrive while quantum computing matures and evolves as a technology.
