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Quantum computing could be the next big thing in tech after artificial intelligence (AI). However, it will take many years before the market really takes shape and practical uses for quantum computing develop.
Still, quantum computing could be worth an estimated $840 billion in the next 15 years, according to Boston Consulting Group, and that's simply too big a market for investors to ignore. If you want ideas about which stocks to buy now and hold for the long haul, here are two companies where quantum computing could eventually move the needle.
1. Alphabet
Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), Google's parent company, has been invested in quantum computing for years, but it recently made an advancement that positioned it as a standout company in the space. Alphabet introduced Willow, a new quantum computing processor it believes is a big step forward.
Alphabet said Willow achieved a benchmark computation in just five minutes, which would have taken a traditional supercomputer more time to complete than the age of the universe (you can't make this stuff up). To be fair, the benchmark is for quantum computers, not traditional computers. The point is that Willow is very fast, even among quantum computing chips.
Not only is Willow good at quantum computing processing, but it's also less inclined to make mistakes than other processors. The company said in a blog post that Willow can "reduce errors exponentially" and the chip "cracks a key challenge in quantum error correction that the field has pursued for almost 30 years." In short, it's potentially better at completing quantum computing processing than its competitors.
Alphabet's impressive progress with Willow could give the company an advantage over quantum computing rivals in the near future, but one thing that really makes it a good stock to buy right now is that its shares are priced well.
Alphabet's stock has a forward price-to-earnings (P/E) multiple of just 21, compared to the S&P 500's 24. This makes Alphabet's stock relatively cheap at a time when the company is making significant quantum computing advancements. And with Alphabet's hands in much more than quantum computing -- including advertising, artificial intelligence, and cloud computing -- you can hedge your quantum computing bet with other opportunities with just one stock.
2. IBM
IBM (NYSE: IBM) may not be at the top of your must-have hot stocks right now, but there are some compelling reasons why this tech stalwart could be a solid long-term quantum computing winner. First, the company has been in this space for years, developing quantum computers and related software. It already has partnerships with large corporations to use its computers in healthcare, finance, and other sectors.