Investing in quantum computing has brought some unusual challenges. Its quantum bits, called qubits, can store any value between zero and one. This factor makes quantum computers exponentially faster than traditional computers, whose bits can only store zeroes and ones.
However, quantum computing is also a solution without a problem to solve, dramatically limiting its addressable market. With most companies in this industry unable to generate sufficient revenues, many quantum computing stocks have struggled to maintain their stock gains. But amid market conditions, one specific quantum stock could prosper during the remainder of 2025.
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The quantum computing stock for 2025
Amid the current state of the market, Google-parent Alphabet (GOOGL 1.67%) (GOOG 1.56%) should appear attractive to investors.
Admittedly, this may appear to be a baffling choice at first glance. The company generated more than $90 billion in revenue in the first quarter of 2025, with over 99% of that revenue coming from its digital advertising businesses and Google Cloud. Seeing those numbers arguably raises the question of why one should consider Alphabet a quantum computing investment when the technology has no representation in the company's financial statements.
However, such a strategy makes more sense when considering the state of pure-play quantum computing companies. Without an apparent addressable market, such companies depend on government contracts that fall far short of covering the company's operating expenses.
The financials of these companies outline the struggle. In the first quarter, IonQ reported $7.5 million in revenue, a small fraction of its $83.2 million in costs and expenses. Even with $38.5 million in gains on the fair value of warrant liabilities, it still lost $38.3 million.
Rigetti Computing reported a similar story, with revenue of $1.5 million falling far short of the $22.1 million in operating expenses. Interestingly, a $53.3 million change in the fair value of derivative warrant liabilities helped it earn $42.6 million in net income for the quarter.
Still, investors cannot depend on one-time benefits for long-term profitability, and with operating expenses far exceeding revenue for both companies, such pure-play quantum computing companies look like less attractive options.
NASDAQ: GOOGL
Key Data Points
Alphabet and quantum computing
In contrast, Alphabet does not have funding issues, with $95.7 billion in liquidity and $19 billion in free cash flow in the first quarter of 2025 alone. Its free cash flow does not include the $75 billion Alphabet pledged to spend on capital expenditures this year, leaving it billions to invest in quantum computing.
Such investments led to the development of Willow, its quantum computing chip, which it released in December. For one, Willow stands out for its speed, as its chip recently completed a benchmark computation in less than five minutes. That same computation would take 10 septillion (1025) years on a traditional supercomputer, a time period well over the estimated age of the universe.
Additionally, the Willow quantum computing chip stands out because it can reduce error rates as the number of qubits rises. Error rates have been a significant challenge for the industry, which has experienced a rise in error rates as quantum computers have become faster.
Furthermore, Alphabet will likely develop and release improved versions of the Willow chip over time. Those efforts keep Alphabet competitive in the quantum space and position it to prosper once the technology becomes more applicable to the world's problems.
Investing in Alphabet
Although quantum computing is not currently a primary revenue source for Alphabet, the company is likely the stock of choice in this industry in 2025.
That may disappoint investors, as the company does not mention quantum computing in its earnings releases, nor does it report any revenue or funding tied to that technology.
Nonetheless, Alphabet's free cash flows from other businesses have funded initiatives such as quantum computing. That gives the company ample resources to refine Willow and improve its technology continually. In contrast, many quantum computing start-ups struggle to find adequate funding to stay in business, much less invest in improving their technologies.
Ultimately, a stronger financial position and its development of Willow strongly position the Google parent in this industry. Once applications for quantum computing begin to emerge, Alphabet should be in a strong position to capitalize on opportunities.
