Artificial intelligence (AI) stocks led the S&P 500 higher in recent years as investors aimed to get involved early in this high-growth market. The AI story is far from over, but it may soon have to share its status as "the next big thing" with another technology. I'm talking about quantum computing, which may tackle problems that are impossible even for today's most powerful supercomputers.
Researchers and companies are making tremendous progress in quantum computing, and some predict that general usefulness of these systems is just a few years down the road. That's why now is a great time to get in on potential winners.
You could choose pure-play quantum companies or those focused uniquely on this technology. But the best bet for investors who remain a bit cautious, yet still hope to benefit as quantum computing takes off, is buying shares of companies that don't depend uniquely on this technology for revenue.
The following two fit the bill and are great buys right now.
Image source: Getty Images.
1. Alphabet
Alphabet (GOOG 0.45%) (GOOGL 0.39%) is a company you probably turn to every day. That's because it's the owner of Google Search, the world's most popular search engine. And this Google platform is Alphabet's biggest revenue driver as advertisers rush to promote their products and services here.
Meanwhile, Alphabet also is working on a variety of other technologies, from AI to quantum computing. And it's made significant advancements in quantum in recent quarters. It announced its quantum chip, Willow, which has the ability to reduce errors exponentially as the system scales up. Alphabet, using Willow, ran its Quantum Echoes algorithm and produced results that topped those of classical computers.
NASDAQ: GOOGL
Key Data Points
And today, Alphabet shares trade at 26x forward earnings estimates, making them a fantastic buy.
2. Microsoft
Microsoft (MSFT 1.49%) has a booming business, from software to cloud computing, and has generated long-term earnings growth. It's a well-established technology giant that you can count on -- and at the same time, this player and its shareholders may see growth explode higher in the future thanks to its work in quantum computing.
NASDAQ: MSFT
Key Data Points
Last year, Microsoft unveiled its Majorana 1 chip, powered by a type of material that could shorten the timeline to quantum computing usefulness. Majorana uses a material that may control particles to make more reliable qubits -- the building blocks for these computers -- that scale more easily. Microsoft also launched a program to help businesses become quantum ready as it sees this technology blooming sooner rather than later.
Right now, you can get in on this top tech stock for only 23x forward earnings estimates, making it a fantastic quantum computing player to buy and hold.
