Though artificial intelligence (AI) has captivated investors for years, it's not the only game-changing technology making waves on Wall Street. The rise of quantum computing is estimated to create up to $850 billion in global economic value by 2040, according to analysts at Boston Consulting Group.
Quantum computing stocks were also briefly running circles around AI stocks last year. As of mid-October 2025, shares of IonQ (IONQ +7.07%), Rigetti Computing (RGTI +8.52%), and D-Wave Quantum (QBTS +11.17%) had rallied as much as 6,200% on a trailing 12-month basis. These are life-altering returns that are bound to get Wall Street's attention.
Image source: Getty Images.
But you might be surprised to learn that these pure-play stocks aren't the preferred way billionaires have chosen to invest in the quantum computing revolution.
Historical headwinds may rain on the quantum computing parade
Although IonQ, Rigetti, and D-Wave have soared, all three are facing an assortment of historical headwinds.
For instance, every game-changing technology and trend since the advent of the internet more than three decades ago has navigated an early stage bubble-bursting event. These bubbles form and subsequently burst because investors consistently overestimate how quickly an innovation will be adopted and/or optimized. Quantum computers are a long way from mainstream utility and optimizing sales and profits for the companies deploying them. In other words, quantum computing has all the hallmarks of a bubble in the making.
NYSE: IONQ
Key Data Points
The valuations of IonQ, Rigetti Computing, and D-Wave Quantum can't be justified, either. History shows that price-to-sales (P/S) ratios above 30 for companies at the forefront of a next-big-thing trend aren't sustainable over extended periods. This pure-play trio ended the previous week at P/S ratios ranging from 94 to 735.
Worst of all, the barrier to entry in the quantum computing space is relatively small, which is probably why billionaires have settled on Google parent Alphabet (GOOGL +10.06%)(GOOG +10.00%) as their preferred quantum computing stock to own.
Image source: Getty Images.
Alphabet is the preferred quantum computing stock of billionaire investors
Unlike pure-play quantum computing stocks, Alphabet has several established, highly profitable operating segments with sustained competitive advantages. Google is a virtual monopoly that accounts for roughly 90% of global internet search traffic, while YouTube is the second-most-visited site in the world behind Google. Alphabet is ideally positioned to command exceptional ad pricing power.
It also oversees the third-largest cloud infrastructure services platform by total spend, Google Cloud. Integrating generative AI and large language model capabilities into Google Cloud reaccelerated this segment's sales growth to 48% in the fourth quarter.
But Alphabet is developing quantum processing units, as well. It unveiled Willow in December 2024 and tested a quantum algorithm on its hardware in October. The company revealed that computations were 13,000 times faster than the quickest supercomputer.
NASDAQ: GOOGL
Key Data Points
Even if quantum computers take several years to become mainstream, Alphabet has the hardware and cash flow to become a major player.
In the September-ended quarter, Berkshire Hathaway's now-retired billionaire boss, Warren Buffett, scooped up over 17.8 million shares of Alphabet's Class A shares (GOOGL). Meanwhile, it's the largest holding for billionaire Chase Coleman's Tiger Global Management as of Dec. 31, and the third-largest holding, including both share classes, for Pershing Square Capital Management's Bill Ackman.
Following the money in the quantum computing arena leads to Alphabet.
