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Quantum computing could revolutionize the computing industry once the technology matures.
IBM, Alphabet, and Microsoft are all pushing toward commercial viability .
All three companies are positioned to be major players in the future quantum computing industry.
Quantum computing, which leverages the properties of quantum mechanics to perform certain computations exponentially faster than classical computers, is a technology that could revolutionize the computing industry. Researchers have been making progress for decades, but real-world use cases are still in the future.
While quantum computing isn't commercially viable right now, multiple companies are pushing toward that goal. For investors wanting exposure to quantum computing, three appealing stocks are International Business Machines (NYSE: IBM), Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL), and Microsoft (NASDAQ: MSFT).
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IBM has been working on quantum computing for decades. The first computer that leveraged quantum principles was built by IBM in collaboration with major universities back in 1998 , using hydrogen and chlorine atoms to sort an unordered list of items. The company has made immense progress since then. Today, you can access a quantum computer over the internet from IBM with up to 156 qubits, or quantum bits, to run quantum workloads.
IBM's quantum computers aren't yet useful for solving real-world problems faster than classical computing techniques, but the company's roadmap sees the main issues being solved over the next decade. By the end of next year, IBM expects to have demonstrated scientific quantum advantage. By 2029, IBM believes it will have built a fault-tolerant quantum computer. And in 2033 and beyond, the company will scale up its fault-tolerant quantum computers, unlocking real-world use cases.
Recently, IBM and HSBC demonstrated that combining IBM's quantum computers with classical machine learning techniques could produce a meaningful speedup in a certain computation related to bond trading. IBM's strategy is to leverage quantum computing alongside classical computing. Last week, the company said that a key quantum computing error correction algorithm could be run on standard chips from AMD.
IBM was nearing $1 billion in cumulative quantum computing signings earlier this year, with universities and enterprises partnering with the company to experiment and research. As commercial viability is reached, IBM will be in a prime position to be a leader in the quantum computing market.
Alphabet has made some quantum computing breakthroughs of its own. The search and cloud computing giant unveiled its Willow quantum computing chip late last year, with the company touting its ability to exponentially reduce errors as the chip scales up to more qubits. Because qubits tend to be unstable and fragile, error correction is a thorny problem that must be solved before quantum computers become truly useful for real-world problems.
In October, Alphabet announced that it had used its Willow chip to run a particular quantum algorithm 13,000 times faster than a classical supercomputer. Additionally, the company worked with The University of California, Berkeley using that algorithm and the Willow chip to study two molecules. The results obtained matched those of traditional methods.
Alphabet was quick to note that these achievements pave a path toward real-world applications. The company isn't there yet, and it could very well take many years before Alphabet's quantum computing efforts yield a commercially viable business. But, like IBM, Alphabet is plugging away, and it has a good shot at being a quantum computing leader when the technology matures.
Fellow tech giant Microsoft is also a lead horse in the quantum computing race. The company is taking a different approach, leveraging the properties of an exotic type of particle to build quantum processors that can theoretically scale up to a million qubits.
In February, Microsoft unveiled its Majorana 1 quantum processing unit. The company believes that it can eventually put 1 million qubits on a single chip, and it sees a path to building a prototype of a scalable fault-tolerant quantum computer over the next few years.
Microsoft leveraged the unique properties of what it calls a new state of matter to produce a quantum chip with qubits that are more stable compared to other techniques. While there's still plenty of work to do in scaling up the technology, the company believes this approach will simplify error correction.
Microsoft is still early in its quantum roadmap, having produced a qubit with built-in error protection. Next up is to further reduce error rates, then scale up to multiple qubits. The end goal is to build a quantum supercomputer that can solve scientific and commercial problems faster than classical computers, which will require at least 1 million reliable quantum operations per second with an error rate below 1 in 1 trillion.
While Microsoft is likely to be in the trenches for years iterating, refining, and scaling its quantum computing technology, the payoff could be enormous if the company can get to the end of its roadmap. Microsoft's unique approach to quantum computing holds a lot of promise, and the company could be a big winner if it can reach commercial viability.
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HSBC Holdings is an advertising partner of Motley Fool Money. Timothy Green has positions in International Business Machines. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, International Business Machines, and Microsoft. The Motley Fool recommends HSBC Holdings and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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