Two of the biggest themes fueling stock market action today are the areas of artificial intelligence (AI) and quantum computing. These technologies are complementary and could be game changers for companies down the road -- helping them solve previously impossible problems and make tremendous gains in efficiency. Investors have piled into companies involved in these technologies, and that's helped the S&P 500 soar in the double digits over the past two years.
Artificial intelligence involves the training of large language models with enormous amounts of data so they can go on to actually reason and apply solutions to problems. Quantum computing applies rules of a branch of physics that studies the interaction of subatomic particles. By doing this, these computers can process more data at once than classical computers, suggesting they could potentially solve problems in minutes that would take a classical computer thousands of years. Eventually, quantum computing could accelerate AI workloads, so these two technologies may work hand-in-hand.
Now you might be wondering about the best way to invest in AI and quantum computing. Of course, there are various possibilities depending on your investment strategy and comfort with risk. But I've got an idea that could suit all investors -- from the cautious to the aggressive. And that's considering two companies that already have delivered strong earnings growth over time and could win in the AI and quantum computer revolutions. Let's check them out.
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1. Microsoft
Microsoft(NASDAQ: MSFT) became a household name thanks to its software business, and over time has grown to become one of the world's biggest companies, with a market value of more than $3 trillion. The tech giant has delivered earnings growth over the long term. And it's proven than its investments have been smart ones -- we can see this by the increase in return on invested capital (ROIC).
And in recent times, Microsoft has demonstrated its strengths in AI too, selling a variety of products and services to both individuals and companies. For example, Microsoft offers Copilot AI companions that help people in their daily life, and through its cloud platform, Azure,, it offers companies a wide range of AI tools including access to OpenAI models. In the most recent quarter, the tech giant said its AI business reached an annual revenue run rate of more than $13 billion, for an increase of more than 175% year over year. So, Microsoft is well positioned to continue benefiting from AI as the market develops.
On top of this, Microsoft also is making major progress in the area of quantum computing. It recently announced Majorana 1, its new quantum chip that could make it possible to solve meaningful problems "in years, not decades," the company said. It uses a topoconductor, or a type of material that can create a new state of matter. And this allows for the production of a new qubit -- the element that stores and processes information -- that is stable, fast, and small, and this sets Microsoft on the path to meaningfully scale processing power.
All of this puts Microsoft in an excellent position to benefit from the quantum computing boom down the road. At the same time, investors will continue to benefit from the company's well-established businesses.
2. Alphabet
Alphabet(NASDAQ: GOOG)(NASDAQ: GOOGL), like Microsoft, is a business most people have heard of and probably interacted with. After all, the company's Google Search is the world's leading search engine, with market share of about 90%. And also like Microsoft, Alphabet has proven its ability to grow earnings over time. The company generates most of its revenue through advertising; advertisers flock to the Google platform to try to reach us where they know they can find us.
This top tech company hasn't remained still, though, and has readily expanded into the areas of AI and quantum computing. Alphabet already is generating AI revenue through its cloud computing business, where it offers customers a wide range of products and services. And Alphabet is using its own large language model, Gemini, to improve its search business -- making results better than ever.
In fact, AI has become such a key part of the business that Alphabet recently announced $75 billion in capital spending this year, with much of it meant to support AI infrastructure growth.
As for quantum computing, Alphabet late last year announced its latest quantum chip, Willow, and this chip reached two big milestones right out of the gate. Alphabet said that it showed that it can reduce errors exponentially as a system scales up, and that it performed a computation in five minutes that would have taken a classical computer an amount of time that exceeds the age of the universe. Alphabet says it expects the Willow generation of chips to reach the goal of showing usefulness in real-world applications.
The fact that you can count on Alphabet's search and cloud businesses for strong earnings quarter after quarter make it a stock you can rely on over time -- and the company's quantum chip progress offers high-growth potential, too. All of this makes Alphabet a fantastic player to consider in the quantum boom.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool 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.
