Prediction: This Stock Will Be Quantum Computing’s Biggest Winner in 2025

In recent months, investors have shown renewed interest in quantum computing. Traditional computer bits can only contain zeros or ones. However, quantum bits, commonly called qubits, can represent any value between zero and one. This advancement enables exponentially faster computing speeds compared to traditional computers.

The problem lies in stability, because the more qubits a computer can process, the more error-prone it becomes. For this reason, most industry analysts believe that quantum computing will be years away from being commercially viable.

Fortunately, Google’s parent Alphabet (GOOGL 1.60%) (GOOG 1.62%) has developed a quantum chip that could be a game-changer for the industry. With this development, Alphabet could become the top performing quantum computing stock in 2025. Here’s why.

Alphabet and quantum computing

Indeed, consumers and investors are most familiar with Alphabet for products such as Google Search, YouTube, Android operating system and Google Cloud. Nonetheless, the company founded Google Quantum AI in 2012 and has been studying the technology and building computers ever since.

Alphabet’s focus in quantum computing mostly revolves around Willow, its quantum chip. Willow stands out because she reduced errors because it adds qubits. This contrasts with quantum chips of the past, whose error rates increased as the number of qubits increased.

Additionally, Willow completed a standard baseline calculation in about five minutes. This is notable because it estimates that the fastest supercomputers in use today would take 10 septillion (10^25) years to perform the same calculation, a period longer than the entire history of the universe.

Certainly, quantum computing is a technology in search of concrete applications. Still, the ability to resolve error issues bodes well for Alphabet’s efforts to make quantum computing both beneficial and profitable.

Numbers on the Alphabet side

Additionally, with commercial viability likely several years away, the company’s other attributes could take center stage in 2025 as quantum computing efforts remain focused on research and development.

Indeed, a massive and highly profitable digital advertising business will likely help fund the company’s research. Additionally, a fast-growing Google Cloud business contributes a growing share of revenue and has made Alphabet increasingly essential in the IT world with its cloud presence and long-standing innovation in artificial intelligence (AI).

Thanks to the success of these businesses, Alphabet held $93 billion in cash at the end of the third quarter of 2024. Additionally, it generated nearly $62 billion in free cash flow in the first nine months of 2024 alone. These assets put Alphabet in a strong position to finance quantum computing and all the technologies that support it.

This places it in stark contrast to a quantum computing startup such as IonQ. Although IonQ’s ties to academia have helped it develop faster quantum computers, its steep losses could mean it runs out of money before it can apply the technology commercially.

Additionally, Alphabet stock is up nearly 40% over the past year, surpassing the S&P500. Despite these gains, its P/E ratio as of this writing is 26, making it the cheapest stock by this measure among the “Magnificent Seven.”

Winning with Alphabet in 2025

Thanks to Willow and the resources and talent that made this possible, Alphabet could easily become the quantum winner of 2025.

The release of Willow and its success in combating the error-prone nature of quantum computer chips likely makes Google’s parent company the leading company in this sector in 2025.

Additionally, although commercial viability is only a few years away, its lucrative digital advertising and cloud computing businesses will likely bolster its massive free cash flow, which will help fund more research into quantum computing and technologies that should help make it useful for commercial purposes.

Finally, the fact that Alphabet offers the lowest P/E ratio among Magnificent Seven stocks provides investors with added incentive to buy the stock.

Given this low valuation and its apparent technical lead, quantum computing investors appear to have the best chance of success with Alphabet in 2025.