Quantum Computing: IonQ vs. Alphabet’s Quest for Breakthroughs

In the rapidly evolving field of artificial intelligence, quantum computing is drawing significant interest. Although many companies are investigating this technology, only a select few have made substantial progress.

Leading the charge are IonQ (NYSE: IONQ) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL). As of market close on December 13, shares of IonQ surged by 173% this year, vastly outperforming Alphabet’s return of 36%.

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Could IonQ be poised to outpace one of the tech sector’s giants? Let’s take a closer look at how each company is navigating the quantum computing landscape and evaluate which one might be the wiser investment choice.

Understanding Quantum Computing

Quantum computing utilizes the principles of quantum mechanics to enhance speed and efficiency in solving complex problems. Traditional computers use binary bits (0s or 1s) for data storage, while quantum computers employ qubits. This innovative approach allows qubits to exist in multiple states at once, a concept known as superposition.

This capability means quantum computers could solve problems that would take current computers years, or even decades, to resolve.

Image source: Getty Images.

Examining IonQ

IonQ focuses on a specific segment of quantum computing known as trapped ion technology. This involves using lasers to control ions that represent qubits. The company claims this technique leads to lower error rates during data processing, speeding up operations for complex applications.

IonQ has established partnerships with major cloud computing providers like Microsoft, Amazon, and Google. This allows software developers using these networks to access IonQ’s quantum services, saving them the effort of developing such hardware themselves.

Despite these promising developments, IonQ’s financial statements reveal challenges. The company generated only $37.5 million in sales over the past year, indicating that quantum computing remains an emerging sector with limited demand. Furthermore, IonQ is not yet profitable, with increasing net losses even as revenue grows.

IONQ Revenue (TTM) data by YCharts

Insights on Alphabet

Alphabet, the parent company of Google, is widely recognized for its dominance in online search. However, it also has many innovative projects, particularly in the field of quantum computing, where it has made significant strides over the years.

In 2019, Google’s quantum processor called Sycamore performed a computation in 200 seconds that it estimated would take a supercomputer about 10,000 years to solve. This achievement was termed quantum supremacy, showcasing the advantages of quantum technology over conventional computing methods.

Recently, Google announced its latest development: a chip named Willow. This new architecture improves qubit control and reduces error rates, making it capable of solving a benchmark problem in under five minutes—an undertaking that would supposedly take current supercomputers 10 septillion years.

The Bottom Line

Both IonQ and Alphabet have made encouraging advancements in quantum computing, but the path ahead remains long. This technology is not yet ready for widespread commercial use and likely won’t be mainstream for at least another decade. It’s probable that both firms will continue to invest heavily in research and development for upcoming quantum initiatives in the coming years.

However, Alphabet can finance these growth projects without compromising its core revenue streams in advertising, search, and cloud services. In contrast, IonQ’s financial resources are more constrained, positioning its business model as uncertain and speculative for now.

Given these factors, I recommend Alphabet as the stronger investment option, even if its stock price doesn’t react dramatically to its quantum computing news.

Should You Invest $1,000 in IonQ Right Now?

Before purchasing stock in IonQ, consider the following:

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Alphabet, Amazon, and Microsoft. The Motley Fool holds positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool suggests 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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.