The internet has dramatically changed the world, and that change has occurred entirely in my lifetime. However, the dot-com bubble at the turn of the century should be a strong warning to investors, as newer, potentially more impactful technologies continue to emerge.
This is why my quantum computing pick in 2026 is a bit on the boring side.
I bought into the quantum story years ago
The truth is that I've owned my big quantum play for about a decade. It was a legitimate factor in my decision to invest in International Business Machines (IBM 0.61%), but when I hit the buy button, quantum was still in its early stages of development. I reasoned at the time that IBM had the resources and technological capabilities to turn quantum into a real business at some point in the distant future.
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I didn't expect quantum to become a hot topic on Wall Street within a decade when I added IBM to my portfolio. And, in truth, the real driver of the company's results has been its pivot into cloud computing and artificial intelligence. That said, the next big thing could very well be quantum computing, and IBM is likely to be an important player in the space.
IBM's diversification and deep pockets are the key
IBM's business and stock have both rebounded strongly since I bought shares in 2016, which is nice. However, a deep drawdown, driven by investor fears about AI's impact on the company's business, has tempered my gains. I'm not overly concerned because IBM is a large and diversified business. I expect AI to benefit the company by helping IBM better serve its business customers over the long term.
NYSE: IBM
Key Data Points
Meanwhile, IBM can use its vast resources to continue investing in the next big technology. It seems highly likely that technology will be quantum. If it isn't, well, that's not a big problem for me because I'm confident that IBM will just pivot again, like it has many times in its over 100-year history. It has the financial strength and the research and development depth to do that. That isn't something that can be said of a company that is 100% focused on quantum computing, like IonQ (IONQ 2.33%).
IonQ is seeing material revenue growth, which is exciting, but it is also bleeding red ink. The losses aren't going to stop in 2026 based on management's guidance. If you are a conservative investor like I am and you want to add some quantum exposure to your portfolio, IBM is likely to be a better choice. IBM is hardly cheap, but after an over 20% drawdown on AI concerns, it is cheaper than it has been in a little while.
