Artificial intelligence (AI) has been a game-changing growth driver for more than two years now. More recently, investors have embraced quantum computing as the Next Big Thing with wealth-building promise.
Wouldn’t it be nice if you could invest in both of these market-moving tech trends with a single stock ticker? As it turns out, that’s not hard at all: Some of the biggest names in AI technology are also firmly established thought leaders in the quantum computing space.
You may have more reasons to love your favorite tech stocks than you thought. Read on to see how IBM (NYSE: IBM), Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), and Nvidia (NASDAQ: NVDA) straddle the line between AI leadership and quantum computing inventions.
Everybody knows Nvidia as the name to beat in AI-specific computing hardware. The company’s AI accelerators power most of today’s large language models (LLMs), starting with the head-turning ChatGPT that hit the public market in November 2022. Nvidia’s trailing sales are up nearly 400% since then and the stock price soared more than 500%. The company name has almost become synonymous with AI.
As Google’s parent company, Alphabet is another household name in the AI segment. Its Gemini LLM was one of the first alternatives to ChatGPT, and it remains a leading challenger today. Google has sprinkled AI features all over its online search results, the popular Gmail communications platform, the convenient Google Docs office suite, and more. On second thought, you may have noticed that Google was using AI tools before it was cool. The company introduced deep learning with neural networks to its Google Translate service in 2016, for example.
IBM was already an old hand in artificial intelligence at that point, though. Remember when the company’s Deep Blue chess computer beat world champion Garry Kasparov in a serious match, ushering in the age of unbeatable chess engines and computer-assisted game analysis? Well, that was in 1997, and the Kasparov match was just another step in an even longer journey. IBM wrote its first chess program in 1957 and the first computerized voice control system four years later. Today, IBM’s generative AI platform called Watsonx offers AI tools to enterprise clients, building a $5 billion list of long-term contracts less than two years after its introduction. And nobody earns more AI-related patents than Big Blue, underscoring the company’s world-class research efforts.
So my trio of tech titans has firm roots in the AI market. They may not be the first names that spring to mind in the quantum computing market — but maybe they should be.
The technology breakthrough that sparked a frenzy of investor enthusiasm last fall didn’t come from ultraspecialized quantum computing experts such as IonQ (NYSE: IONQ) or D-Wave Quantum (NYSE: QBTS). The Willow quantum computing chip that used next-generation error correction to score ridiculously well in a quantum computing benchmark was developed by the Google Quantum AI team. The same Alphabet subsidiary has set up a long-term road map toward creating truly useful quantum computers, and Willow’s error correction was just the second of six milestones.
That brings me to Nvidia. In January, comments from CEO Jensen Huang underscored the long-term nature of the quantum revolution. Commercial-grade quantum computing systems could be available perhaps 20 years from now, Huang suggested. And Nvidia has serious skin in this game, adding weight to his analysis. The company’s focus is on connecting the current market’s digital computers to tomorrow’s quantum computers. Bridging that gap will help people write effective quantum computing algorithms and control tomorrow’s next-era systems, so it’s important work. If Huang concedes that this opportunity isn’t exactly around the corner, investors should take that slower outlook seriously. Quantum computing could become an important growth driver for Nvidia in the long run, but it will take time.
IBM boasts “the largest quantum computing fleet in the world” in its Quiskit service. Developers can rent processing time on Quiskit computers, featuring the company’s own Eagle and Heron quantum processors. Meanwhile, the company provides quantum-safe encryption algorithms for classical computers and consulting services to help other businesses make sense of the quantum computing market’s challenges and opportunities. Oh, and Big Blue is a leading generator of quantum-related patents, too.
IBM, Alphabet, and Nvidia are indeed top-notch names in the two fields of AI and quantum computing. But is this the right time to buy any of these stocks?
Let’s dive in at the deep end. Nvidia’s stock has traded at ridiculously high price-to-earnings ratios in recent years, but those ratios have cooled down in the last few quarters. The stock rose to new all-time highs in early 2025 but the earnings-based divisor soared even higher. Nvidia is making money hand over fist, and full-year earnings are expected to rise more than 50% in fiscal year 2026, which ends next January. So the stock trades at just 21 times forward earnings estimates. In short, Nvidia stock doesn’t look expensive anymore, as long as you continue to expect robust earnings growth. AI-related sales should keep that trend going for a few more years, and then there’s the extremely long-term quantum computing opportunity.
IBM’s shares are found in the same valuation range, trading at 21.7 times forward earnings. By comparison, the average S&P 500 (SNPINDEX: ^GSPC) stock is worth roughly 20.3 times forward earnings. The hypothetical average stock also trades at 25.6 times free cash flow, making IBM look very affordable at 18.6 times its torrential cash profits. It’s easy to argue that this titan of technology and research is undervalued today.
And then there’s Alphabet. In my eyes, the Google parent always looks affordable. Shares are changing hands at 16.4 times forward earnings, and they’re also sitting below the S&P 500 average with a trailing P/E ratio of 20.8. The company is pulling more than its weight in the AI and quantum markets, and Alphabet is one of those rare companies that always seems prepared to handle whatever changes the market throws in its direction. I’d buy Alphabet stock any time, and it looks unusually tasty at the moment.
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Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
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*Stock Advisor returns as of March 24, 2025
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Anders Bylund has positions in Alphabet, International Business Machines, and Nvidia. The Motley Fool has positions in and recommends Alphabet, International Business Machines, and Nvidia. The Motley Fool has a disclosure policy.
Rising Stars: 3 AI Stocks to Watch in the Quantum Computing Space was originally published by The Motley Fool
