Quantum Computing Stocks Are Imploding. Only One is a Buy.

By Corbin Buff, Financial Writer and Stock Researcher

January 10, 2025 12:09 PM UTC

Quantum Computing Stocks Are Imploding. Only One is a Buy.

In December, Google parent company Alphabet’s (NASDAQ: GOOGL) Quantum AI team dropped a bombshell with their breakthrough quantum chip, Willow. It accomplished feats like exponential error correction and solving problems that would take classical supercomputers 10 septillion years.

The announcement sent small-cap quantum stocks like Rigetti (NASDAQ: RGTI) and IonQ (NASDAQ: IONQ) soaring, only for them to crash back to Earth this week, with both losing over 40% on Wednesday, January 8th:

It all begs the question: if you’re interested in quantum computing … why gamble on speculative plays when Alphabet offers a proven core business with moonshot potential on the side?

Google’s Quantum Bet: A Moonshot With Substance

Willow is a marvel of engineering, demonstrating exponential error reduction while scaling up qubits—an essential milestone on the road to practical quantum computing.

It’s not just about buzzwords or flash. Willow is part of a well-funded, long-term roadmap that includes developing commercially relevant algorithms to tackle real-world problems like: drug discovery, energy efficiency, and advanced AI training.

The problem with small, standalone quantum stocks like Rigetti and IonQ is that they still lack meaningful revenue streams and are burning cash at unsustainable rates.

With Alphabet, you don’t just get quantum potential—you get a foundation of rock-solid fundamentals in YouTube, Search, and Cloud to support the more ambitious bets like quantum, robotics, and self-driving projects like Waymo.

–––––––––––––––––––––––––––

A message from our sponsors...

Discover the next Magnificent 7 Stocks--FREE

Where can you find the next big winners? We have identified what we believe will be the Next Magnificent 7. They have all the same qualities of the original "mag 7", like global market share, strong cash flows, and most importantly... a great value-proposition for investors. In short, they could give you the chance to buy the next Apple, Amazon, or Tesla... while they are still under the radar of most investors.

Break free from the investing herd and With The New Mag 7 stocks.

Yours FREE.

Thanks to our sponsors for keeping this content free.

–––––––––––––––––––––––––––

Why Alphabet Still Looks Attractive

Even as Alphabet invests heavily in moonshot projects, valuation remains compelling. Trading at a forward P/E of around 22, Google is arguably cheaper than all of its big tech peers … despite commanding one of the most dominant advertising businesses in history.

In our models, Google currently has a Zen Rating of “B” or Buy, with “B” component grades in Value, Momentum, and more.

Click here to see GOOGL’s component grades and Zen Rating.

Meanwhile, RGTI and IONQ have “D” Zen Ratings, making them a Sell.

GOOGL is also a Buy according to top Wall Street analysts, with no Sell or Strong Sell ratings:

Click here to see GOOGL analyst ratings and price targets.

The Big Picture: Why Quantum Needs Google

Quantum computing is poised to be a trillion-dollar industry, but it’s also riddled with technical challenges, steep development costs, and uncertain time horizons.

Google’s leadership in areas like AI and cloud computing gives them the scale and expertise to integrate quantum breakthroughs into real-world applications faster than smaller competitors.

Plus, their financial strength ensures that projects like Willow can progress without the funding concerns facing most standalone quantum players.

The Bottom Line

The hype around quantum computing is real, but not all quantum stocks are created equal. While speculative plays like Rigetti and IonQ may offer excitement, Alphabet delivers a better blend of moonshot innovation and proven profitability.

Click here to add GOOGL to your watchlist.