The quantum computing sector generated some of the most extraordinary returns in financial markets during 2025, with pure-play names including IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI) and D-Wave Quantum (NYSE: QBTS) rallying as much as 6,200 percent on a trailing 12 month basis at their peak in mid October. Yet the world’s most sophisticated investors, managing billions in capital, have largely passed on all three in favour of Alphabet (NASDAQ: GOOGL / GOOG), Google’s parent company.
Analysts at Boston Consulting Group estimate quantum computing will create up to $850 billion in global economic value by 2040, a figure large enough to justify serious attention. The question for allocators is not whether the technology matters but which vehicle gives the most credible path to capturing that value with the least risk.
The pure-play trio faces a set of well-documented historical headwinds. Every transformational technology since the commercial internet has undergone an early stage bubble and correction phase, driven by investors consistently overestimating how quickly a new innovation reaches mainstream utility. Quantum computers remain a considerable distance from widespread commercial adoption, and the gap between current hardware capability and the scale required to generate consistent revenue for the companies deploying them is significant.
Valuation compounds the concern. History shows that price to sales ratios above 30 for frontier technology companies are difficult to sustain over extended periods. As of the most recent week, IonQ, Rigetti and D-Wave traded at price to sales multiples ranging from 94 to 735, levels that have historically preceded sharp corrections in comparable situations.
The barrier to entry in quantum hardware is also relatively low compared to established technology infrastructure, creating a competitive risk that mature investors tend to penalise.
Alphabet’s appeal lies in the breadth and profitability of its existing operations. Google commands approximately 90 percent of global internet search traffic and YouTube is the second most visited website in the world behind Google itself, together providing exceptional and defensible advertising pricing power across economic cycles.
Google Cloud is the world’s third largest cloud infrastructure platform by spending and its integration of generative AI and large language model capabilities drove 48 percent revenue growth in the segment during the fourth quarter of last year.
On the quantum side, Alphabet unveiled its Willow quantum processing unit in December 2024 and published results showing computations running 13,000 times faster than the world’s quickest supercomputer at the time. Even if mainstream quantum utility is years away, Alphabet has the financial resources and hardware to be a leading player when it arrives, without requiring the company’s valuation to depend on that outcome.
The billionaire endorsement is broad. Warren Buffett’s Berkshire Hathaway (NYSE: BRK.A / BRK.B) acquired over 17.8 million shares of Alphabet’s Class A stock in the September quarter. Alphabet is the largest single holding for Tiger Global Management, the fund run by billionaire Chase Coleman, and represents the third largest position across share classes in Bill Ackman’s Pershing Square Capital Management.
