Quantum computing holds immense potential to solve complex problems far faster than traditional computers. While the technology is still in its early stages, it could revolutionize industries like materials science, drug discovery, artificial intelligence (AI), and logistics in the future.
However, investing in quantum computing companies directly is a risky move at the moment. The technology may take a decade or more before it becomes commercially viable. Instead, investors should focus on large tech companies that are likely to lead the way in quantum computing development. Two of the best options right now are IBM and Microsoft.
IBM’s Long History in Quantum Computing
IBM has been at the forefront of quantum computing research for decades. The company developed its first 2-qubit quantum computer in 1998. IBM’s research progressed, and by 2016, it made quantum computing accessible via the cloud, allowing anyone to experiment with the technology.
Today, IBM has expanded its quantum computers to 127 qubits. Looking forward, the company aims to achieve full error correction by 2029 and scale up to thousands of qubits by 2033. Although solving real-world problems with quantum computers is still years away, IBM is already turning quantum computing into a profitable business. Since 2017, it has earned nearly $1 billion from this field.
For investors, IBM’s progress in quantum computing makes it an even more attractive stock. The company expects to accelerate its revenue growth in 2025, driven by its hybrid cloud and AI businesses. IBM’s AI-related bookings now exceed $5 billion, and its free cash flow is expected to reach $13.5 billion in 2025.
Microsoft’s Breakthrough in Quantum Computing
Microsoft also made a significant breakthrough last month with a new quantum computing chip. This chip, built using exotic particles, offers more stability and fewer errors than traditional quantum computing methods. Microsoft’s goal is to scale this chip up to 1 million qubits.
Though it still faces challenges, including error correction, Microsoft plans to build a fault-tolerant prototype in the next few years. The company’s quantum chips could eventually be integrated into its cloud data centers, providing quantum computing services to customers.
Despite the long timeline before quantum computing generates significant revenue, Microsoft’s overall financial strength makes it a promising investment. The company is a leader in cloud computing and AI. Revenue from both sectors continues to grow rapidly, with AI-related revenue reaching $13 billion annually.
Final Thoughts
While quantum computing may not be ready to transform industries immediately, investing in companies like IBM and Microsoft provides a way to tap into this emerging technology. Both companies have solid track records, strong revenue growth, and the potential to become quantum computing leaders.
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