Quantum computing has been a popular topic on Wall Street in recent weeks due to updates from several companies. In December, Alphabet(NASDAQ: GOOGL)(NASDAQ: GOOG) reached an important technical milestone with its Willow chips. In January, Microsoft launched its Quantum Ready program to help businesses better understand the technology.
As those events unfolded, quantum computing stocks D-Wave, IonQ, and Rigetti Computing initially soared, then declined sharply when the CEOs at Nvidia and Cisco estimated earlier this month that useful quantum computing is about two decades away.
Read on to learn more, including my pick for the best quantum computing stock to buy right now.
Classical computers operate on binary digits called bits, which can either be 1 or 0. Those bits are interpreted by transistors (electronic switches in a microprocessor), such that they can either be in the on or off position. Classical computers process information by rapidly flipping those tiny switches back and forth to either allow or prevent the flow of electricity.
Comparatively, quantum computers operate on quantum bits (called qubits). Unlike classic bits, qubits can exist in multiple states simultaneously, meaning they can be 1 and 0 at the same time. That property allows quantum computers to perform some calculations more quickly, which lets them solve certain problems faster than classical computers.
While use cases are still evolving, experts believe quantum computers will be particularly useful in encrypting data (cybersecurity), simulating molecular structures (drug discovery), optimizing investments (financial services), and training more advanced artificial intelligence models.
In December, Alphabet’s Google subsidiary announced its latest quantum computing chip, Willow. “Our new chip demonstrates error correction and performance that paves the way to a useful, large-scale quantum computer,” the company wrote in a blog, where it also detailed two major technical achievements:
Quantum computing engineers have historically struggled with errors. Building chips with more qubits has led to correspondingly large increases in the number of errors. But Google says Willow does the opposite. “The more qubits we use in Willow, the more we reduce errors,” the company wrote in a blog post.
Willow performed a random circuit sampling benchmark — the hardest benchmark that can be performed on current quantum computers — in under five minutes. But solving the same problem would have taken the most advanced supercomputer 10 septillion years, which is the number 10 followed by 24 zeroes.
Importantly, Google said Willow paves the way to useful quantum computers. In fact, the company sees itself as being on the third step of a six-step roadmap that ultimately leads to commercially relevant applications. It took more than a decade to complete the first two steps.
However, the market reacted as if quantum computing is nearing mainstream adoption. Shares of D-Wave and Rigetti soared about 110% and 280%, respectively, over the three-week period after Google announced Willow simply because they are quantum computing companies.
Nvidia CEO Jensen Huang joined the discussion at 2025 CES on Jan. 6., telling attendees that useful quantum computing is probably about two decades away. D-Wave and Rigetti have since lost about 50% of their value, and investors should think twice before buying the dip. Both stocks have outrageous price-to-sales ratios near 100, and neither company is free cash flow positive.
Image source: Getty Images.
Alphabet is my top quantum computing stock to buy right now. The company is clearly on the cutting edge of quantum technology given its recent success with Willow, and it could theoretically monetize the chip in the near future. However, even if that doesn’t happen, Alphabet has booming businesses in ad tech and cloud computing that should drive steady earnings growth for years to come.
Specifically, Alphabet’s Google subsidiary is the largest digital advertiser and third largest public cloud in the world as measured by sales. Those markets are forecast to expand at 10% annually and 19% annually, respectively, through 2028. And the company is leaning on its expertise in artificial intelligence to create new monetization opportunities across both business segments.
Looking ahead, Wall Street expects Alphabet’s earnings to increase 14% over the next four quarters. That makes the current valuation of 26 times earnings look reasonable. But Wall Street may be underestimating earnings growth. Alphabet has reported above-consensus earnings in the last six quarters, and its actual earnings beat the consensus by an average of 10%, according to data from LSEG.
For that reason, investors with a time horizon of at least three to five years should feel comfortable buying a small position in this stock today.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Cisco Systems, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
