I have a feeling we haven’t heard the last of the quantum computing trend. Even if the emerging technology is many years (or decades) away from its prime, I wouldn’t sleep on the technology, given the potential for numerous breakthroughs (like the Willow one delivered by Alphabet (NASDAQ:GOOG) a few months ago) and other surprises that could help us gain enough clarity to tell how far away we are from having quantum computers be really useful.
Indeed, there’s no shortage of skeptics who don’t see quantum computing as massively useful in the next couple of years. Most notable among the skeptics is Nvidia (NASDAQ:NVDA) top boss, Jensen Huang. While Mr. Huang is a genius when it comes to AI and semiconductors, I’m not so sure if his word on quantum computers should be taken as gospel.
At the end of the day, the future can be profoundly difficult to predict. And all it could take are a few major breakthroughs and one huge release (think ChatGPT just over two years ago) to spark a quantum leap that leads to a frenzy of sorts.
Practical quantum computers are coming. We just don’t know the timeline yet.
Of course, on route to such a quantum leap, there will be short-lived booms and busts as investors grow euphoric, only to get into a panic over some small detail that may not have been aligned with their short-term expectations. So, whether you believe quantum will land for everyday consumers within five years or be more than two decades out, there are ways to play the emergence of the technology that don’t require you to get on a roller-coaster ride of volatility.
In a recent interview with Yahoo! Finance, Bill Gates acknowledged that “there is a possibility in the next three to five years that one of these [quantum] techniques would get enough true logical qubits to solve some very tough problems.” Does that mean Jensen Huang is wrong and the quantum boom is closer than we think?
It’s really hard to tell. Given the pace of innovation as a whole and Microsoft (NASDAQ:MSFT) driving home the point on being “quantum ready,” I’d argue it makes sense to play the long game with quantum with the mega-caps. Here are three names that I view as primed to benefit from quantum’s eventual landing. In the meantime, they’re making the most of the AI boom.
Microsoft
Microsoft is an AI innovator with a big piece of OpenAI and a huge opportunity with its AI Copilot. Indeed, it could take time for Copilot to really take off, but I do view the product as on the eventual path toward the next growth level. As Microsoft gives the AI boom its all, it’s also working on advancing the field of quantum computing. Undoubtedly, quantum and AI could be a very potent innovation combo, and Microsoft seems to be willing to spend to make the next generation of tech a reality.
Last year, the enterprise behemoth announced it’s co-designing what could become “the world’s most powerful quantum computer,” due to release in late 2025. Indeed, Alphabet’s Willow breakthrough may have kicked off a behind-the-scenes quantum race of sorts. And while the payout from such quantum project investments may be further out than AI, I do think the mega-cap tech titans are willing to spend to advance the effort. Whether useful quantum computers land in three to five years or further out down the line, though, remains to be seen.
Either way, Microsoft is hard at work, and it will be interesting to see what the firm pulls the curtain on later this year. My guess is it could re-inject a wave of enthusiasm on the broader quantum scene.
Alphabet
Unsurprisingly, Alphabet is a fast car in the quantum race, just as it is in the AI race. With Microsoft edging out Google to the market when the ChatGPT boom began, my guess is that Google is envisioning itself becoming the first to pull the curtain on a quantum-computing breakthrough that shocks the world.
While the Willow quantum chip sparked a melt-up in quantum stocks just months ago, I do think there’s more to come from Google’s Quantum AI division, especially as it aims to stay ahead of its long-time rival Microsoft. In any case, Alphabet stands out as a long-term AI and quantum play worth betting on for the next decade.
Though the quantum business may not bring in profits anytime soon, I do think it will be there with a product when the time comes and that investors will do well with the name, regardless of when we reach the era of useful quantum computers.
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