Prediction: Quantum AI Will Power the Next Wave of Supercomputing — and This Stock Could Lead It – The Motley Fool

When the average growth investor hears the term "quantum computing," pure-play companies like Rigetti Computing (RGTI 5.28%), cybersecurity players like CrowdStrike (CRWD +1.20%), and chipmakers like Advanced Micro Devices (AMD +7.91%) might come to mind. And to be fair, all of those could be big winners as quantum computing heads toward mainstream viability.
On the other hand, some of the best quantum computing stocks could be hiding in plain sight, disguised as legacy technology companies. One in particular is International Business Machines (IBM 0.95%), better known as IBM. The company formed its quantum computing division a decade ago and has been quietly building a tech advantage in the space ever since.
Image source: Getty Images.
IBM has done a great job over the past decade or so of pivoting away from legacy technologies and toward cloud computing and AI. And quantum computing could be next.
As mentioned, IBM Quantum was launched in 2016. IBM develops its own quantum processors and is leading the charge to solve the biggest roadblock to large-scale quantum computing: reliability. IBM's Heron processor focuses on achieving the lowest possible error rates, rather than simply adding more qubits like many rivals do. I'd go so far as to call IBM a pioneer when it comes to innovations that move quantum computers closer to real-world usefulness.
So far, IBM has achieved every milestone it set out to achieve in quantum computing, and has done so early. The company aims to produce the first-ever large-scale, fault-tolerant quantum computer by 2030, and then to 10X its capabilities within the following three years.
CEO Arvind Krishna is extremely bullish on the future of quantum computing, having said, "It's going to solve the kinds of problems AI could not do," and urging business leaders across industries to start planning for quantum now. The company has partnerships with almost 300 companies and government entities to develop quantum applications and hardware, including AMD and Vanguard, among others.
In fact, IBM was recently awarded a $1 billion federal investment to help construct the first purpose-built quantum chip foundry in the United States. Not only could this foundry be used to produce IBM's proprietary hardware, but to supply advanced quantum chips for the broader tech industry.
Let's be clear. It will be a while before quantum computing generates significant revenue for IBM, and even longer before it becomes a major growth driver for the business. And it's tough to quantify a growth opportunity for a technology that doesn't even exist at the commercial level yet.
Having said that, the global quantum computing market is about $2 billion today, with most of that revenue coming from research grants. By 2030, when IBM expects to deliver its large-scale system, the market will still be just a $4 billion market, according to Grand View Research. But beyond that point, it could grow exponentially. Estimates vary, but Boston Consulting Group projects that between hardware and software, quantum computing could be a $170 billion market by 2040. And IBM is in a good position to capture a large share of it.
To be sure, there's a lot to like about IBM right now. For example, the AI book of business is growing exponentially right now and helping offset any weakness in the legacy parts of its consulting business.
Investing in IBM is a nice combination of a well-established business and several massive market opportunities going forward. It is the quantum computing stock I own the most in my portfolio, and now could be an excellent time to buy before investors begin to recognize its long-term quantum computing potential if it continues on its current trajectory of innovation.
Matt Frankel, CFP has positions in International Business Machines. The Motley Fool has positions in and recommends Advanced Micro Devices, CrowdStrike, and International Business Machines. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.
Making the world smarter, happier, and richer.
© 1995 – 2026 The Motley Fool. All rights reserved.
Market data powered by Xignite and Polygon.io.
About The Motley Fool
Our Services
Around the Globe
Free Tools
Affiliates & Friends
There are some excellent quantum computing stocks, but here's one to add to the list.

source
This is a newsfeed from leading technology publications. No additional editorial review has been performed before posting.