Quantum computing isn't as popular a theme among investors now as it was just a couple of months ago, which means that this could be a good time to start considering some top-tier stocks in this segment. Stock prices in the industry are driven by hype at this stage, and when the hype cycle is low, it can offer opportunities to buy in.
With experts not expecting quantum computing systems to deliver broad real-world advantages over classical computers any earlier than 2030, we have a long way to go before we find out which companies will be the winners in this emerging industry. As a result, I think it's better for investors interested in getting exposure to the technology to spread their investments out across multiple companies -- some that have established businesses in other areas and are also involved in quantum computing, as well as some of the riskier quantum computing pure plays.
I think a diversified trio of stocks like this one would be a great place for investors to start.
Image source: Getty Images.
Alphabet
Alphabet (GOOG 1.69%) (GOOGL 1.66%) has become one of the biggest companies in the world thanks to the dominance of Google Search. The profits from ad sales connected to that product have allowed Alphabet to fund other endeavors, such as its popular generative AI model and its dominant cloud computing business. Another area that it's diving into is quantum computing, and it seems to be having some success with that technology.
Earlier this year, the company announced that its Willow chip had run an algorithm that for the first time demonstrated a verifiable quantum computing advantage. This is a huge deal because it shows that viable quantum computing isn't as far away as some may think. While the forecast arrival of generally useful quantum computing is still no sooner than 2030, in some niche cases, it could prove viable sooner than that.
NASDAQ: GOOGL
Key Data Points
Alphabet, of course, isn't an all-or-nothing investment in this new technology. The company is a massive and diversified business that uses excess cash flow from its core operations to fund new research. If it can develop effective quantum computing technologies in-house, those will boost its artificial intelligence efforts and increase its cloud computing client base.
Alphabet's base businesses are set to thrive in 2026, and with plenty of cash to fund its quantum research, its stock is a top pick in the space.
Nvidia
Nvidia (NVDA 1.53%) isn't making a quantum processing unit to compete with all of the various companies involved in this realm. Instead, it's focusing on maximizing its traditional graphics processing units (GPUs). But it's not ignoring the quantum realm.
Nvidia understands that this new technology will likely be deployed in hybrid systems that use both traditional and quantum computers. This will require an interface between the two, and Nvidia released NVQLink to serve just that purpose.
This ensures that many cutting-edge quantum computing players will be using its hardware and software to interface with classical hardware, making it a perfect investment to bridge the gap between the old and the new technologies.
NASDAQ: NVDA
Key Data Points
With demand for its AI accelerators not expected to slow down, Nvidia should be a great stock to own while we wait for quantum technology to arrive.
IonQ
IonQ (IONQ 3.62%) is one of the risky upstarts that's betting it all on bringing a practical version of this technology to market. There are several other small quantum computing pure plays, but in my opinion, IonQ is the best bet to provide a useful application.
All quantum computers are built around qubits (quantum bits), but there are numerous ways to create them. IonQ is taking a relatively unusual approach -- trapped ion qubits. That technology trades some speed for greater accuracy. Right now, IonQ holds the world record for the quantum computing system with the best two-qubit gate fidelity, which is a measure of how unlikely it is for the system to have a result with an error in it after a computation passes through two quantum operations.
The company has achieved 99.99% two-qubit gate fidelity, indicating about one error in every 10,000 operations. That's a huge lead over its rivals, which have yet to breach the 99.9% threshold (one error in every 1,000 operations).
NYSE: IONQ
Key Data Points
Time will tell if this head start will be enough for it to establish itself as the top quantum computing provider, but it's a good beginning. IonQ is the leading start-up quantum computing business, so it's my top pick for the high-risk side of this group of investments.
If IonQ's approach pans out, it could provide monster returns. If it doesn't, the stock will likely go to $0. However, even if that happens, your investments in Alphabet and Nvidia should be able to pick up the slack, which is why it's smart to balance out risky investments with more conservative ones.
