In recent months, investors have shown renewed interest in quantum computing. Traditional computer bits can contain only zeros or ones. However, quantum bits, commonly called qubits, can represent any value between zero and one. This advancement enables exponentially higher computing speeds compared to traditional computers.
The problem lies in stability, since the more qubits a computer can process, the more error-prone it becomes. For this reason, most industry analysts believe that quantum computing is years away from commercial viability.
Fortunately, Google Parent Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) has developed a quantum chip that is a possible game changer in the industry. With such a development, Alphabet could be the most successful quantum computing in 2025. Here’s why.
Indeed, consumers and investors know Alphabet best for products such as Google Search, YouTube, the Android operating system and Google Cloud. Despite this, the company founded Google Quantum AI in 2012 and has been researching the technology and building computers ever since.
Most of the focus on Alphabet in the quantum computing space revolves around Willow, its quantum chip. Willow stands out because it reduces errors while adding qubits. This contrasts with past quantum chips, whose error rates increased as the number of qubits increased.
Additionally, Willow performed a standard benchmark calculation in about five minutes. This is significant because it is estimated that the fastest supercomputers in use today would take 10 septillion (10^25) years to perform the same calculation, a period longer than the entire history of the universe.
Admittedly, quantum computing is a technology in search of real-world applications. Still, the ability to solve problems with errors bodes well for Alphabet’s efforts to make quantum computing both useful and profitable.
Moreover, with commercial viability likely years away, the company’s other attributes could take the lead in 2025 as quantum computing efforts continue to focus on research and development.
Indeed, a massive and highly profitable digital ad business is likely to help fund the company’s research. Also, the fast-growing Google Cloud enterprise is contributing increasing shares of revenue and has made Alphabet increasingly critical in the IT world with its presence in the cloud and years of innovation in artificial intelligence (AI).
Thanks to the success of those deals, Alphabet had $93 billion in liquidity at the end of the third quarter of 2024. Furthermore, it generated nearly $62 billion in free cash flow in the first nine months of 2024 alone. Those assets put Alphabet in a strong position to finance quantum computing and all of its attendant technology.
