This value will be the biggest quantum computing winner of 2025

In recent months, investors have taken a 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, since the more qubits a computer can process, the more prone to errors. For this reason, most industry analysts believe that quantum computing is years away from commercial viability.

Fortunately, parent of Google alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has developed a quantum chip that is a potential game changer for the industry. With this development, Alphabet could become more successful quantum computing stock in 2025. Here’s why.

In fact, consumers and investors know Alphabet best for products like Google Search, YouTube, the Android operating system and Google Cloud. However, the company founded Google Quantum AI in 2012 and has been researching the technology and building computers ever since.

Most of the focus on Alphabet in the quantum computing space revolves around Willow, its quantum chip. Willow stands out because reduce errors as it adds qubits. This contrasts with previous quantum chips, whose error rates increased as the number of qubits increased.

In addition, Willow performed a standard benchmark calculation in about five minutes. This is remarkable, as he 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.

It is true that quantum computing is a technology in search of real-world applications. Still, the ability to address error issues bodes well for Alphabet’s efforts to make quantum computing beneficial and profitable.

Also, with commercial viability likely years away, the company’s other attributes may come first in 2025 as efforts related to quantum computing remain focused on research and development.

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

Thanks to the success of these businesses, Alphabet had $93 billion in cash at the end of the third quarter of 2024. In addition, 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 any supporting technologies.

This puts it in stark contrast to a quantum computing company like today IonQ. While IonQ’s ties to academia have helped it develop faster quantum computers, its sizable losses could mean it runs out of money before it can apply the technology commercially.

Also, Alphabet shares are up nearly 40% over the past year, surpassing the S&P 500. Despite these gains, its P/E ratio at this writing is 26, making it the cheapest stock by that measure among the “Magnificent Seven.”

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

The launch of Willow and its success in addressing the error-prone nature of quantum computing chips will likely make Google parent the leading company in this industry by 2025.

Also, even if commercial viability is years away, its lucrative digital advertising and cloud business will likely bolster its massive free cash flow, which will help fund further quantum computing research 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 gives investors an additional incentive to buy the stock.

When you factor in that low valuation and its apparent technical leadership, quantum computing investors seem to have the best chance of success with Alphabet in 2025.

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Alphabet executive Suzanne Frey is a member of The Motley Fool’s board of directors. Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions and recommends Alphabet. The Motley Fool has one disclosure policy.

Prediction: This value will be the biggest quantum computing winner in 2025 was originally published by The Motley Fool

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