Bubble or no bubble, this quantum computing stock should be a long-term winner.Share prices sometimes soar more than the underlying businesses of companies warrant. Buying is intensified as a result of hype and investors' fear of missing out (FOMO). These are the tell-tale signs of a stock market bubble. There's a good case to be made that quantum computing stocks are in a bubble. And all bubbles end negatively, often in spectacular fashion. What's the best quantum computing stock to own if the bubble burst ...

Core Insights - The article discusses the significant investments made by billionaires in AI stocks, particularly highlighting Alphabet and Nvidia as the most popular choices among them [1][5]. Investment Trends - In Q3 2025, many billionaires invested in AI stocks, with notable mentions including Broadcom, Meta Platforms, and Microsoft, although they did not rank at the top [2][4]. - Half of the billionaires surveyed purchased either Alphabet or Nvidia stocks during the same quarter [5]. Company-Specific Developments - Berkshire Hathaway, led by Warren Buffett, initiated a significant new position in Alphabet, a move that had been anticipated since Buffett expressed regret for not investing earlier [6][8]. - Tudor Investment hedge fund and Duquesne Family Office also initiated new positions in Broadcom and Meta, indicating a broader interest in these companies [3][4]. Performance Metrics - Alphabet's market cap stands at $3,877 billion, with a gross margin of 59.18% and a dividend yield of 0.26% [7][8]. - Nvidia has a market cap of $4,433 billion, with a gross margin of 70.05% and a dividend yield of 0.03% [10]. Strategic Advantages - Alphabet is positioned to benefit from key technology trends, particularly in AI, with its Google Cloud and Tensor Processing Units (TPUs) potentially challenging Nvidia's GPUs [12][13]. - Nvidia continues to innovate in AI chip technology and plays a crucial role in the autonomous vehicle market, enhancing its competitive edge [13].

Group 1 - Billionaires Warren Buffett, Stanley Druckenmiller, and Israel Englander all invested in Alphabet (NASDAQ: GOOG) during Q3 2025, highlighting a shared confidence in the company's potential despite their differing investment styles [1][3][8] - Buffett made a significant move by purchasing a $4.3 billion stake in Alphabet, marking a notable shift as he had previously expressed regret for not investing earlier [4][8] - Druckenmiller acquired 167,900 shares of Alphabet, while Englander's Millennium Management increased its holdings in Alphabet Class A shares by 65.5% and Class C shares by 33.5% during the same quarter [5][8] Group 2 - Alphabet's Google Quantum AI has achieved significant milestones in quantum computing, including a calculation that would have taken supercomputers 10,000 years to complete, accomplished in just 200 seconds [6] - The company also demonstrated practical quantum error correction with a logical qubit prototype in 2023, showcasing its leadership in the quantum computing space [6] - Despite the advancements in quantum computing, it is suggested that the billionaires were more attracted to Alphabet's advertising revenue and artificial intelligence opportunities rather than solely its quantum computing potential [7][8]

Core Viewpoint - Bill Ackman sold a significant portion of his stake in Alphabet Class A shares, which has raised eyebrows among analysts who believe it was a mistake given the stock's strong performance and bullish outlook from Wall Street [2][5][10]. Group 1: Ackman's Investment Actions - In Q3 2025, Ackman did not initiate any new positions or increase existing holdings, but reduced stakes in four stocks, including a notable sale of over 519,000 shares of Alphabet Class A, decreasing his position by approximately 9.7% [2][4]. - Ackman's hedge fund, Pershing Square, still maintains a substantial investment in Alphabet, holding over 11 million shares valued at around $3.3 billion [10]. Group 2: Wall Street's Perspective on Alphabet - A survey by S&P Global revealed that none of the 66 analysts covering Alphabet recommended selling the stock, with 12 analysts rating it as a "strong buy" and 45 assigning a "buy" rating [7][8]. - Alphabet reported impressive Q3 results, with revenue of $102.3 billion, a 16% year-over-year increase, and earnings rising 33% to approximately $35 billion [8]. Group 3: Alphabet's AI and Future Prospects - Alphabet's advancements in AI, particularly with Google Search and the Gemini large language model, have contributed to its strong market position, with over 650 million monthly active users for Gemini [9][11]. - The launch of Google Gemini 3.0 is expected to enhance Google Cloud's growth, while the Waymo unit is expanding its autonomous ride-hailing services [11][12]. - Alphabet's Google Quantum AI has achieved significant milestones in quantum computing, indicating potential for future applications [12].

Core Insights - Warren Buffett is preparing to step down from Berkshire Hathaway but has identified a new favorite in quantum computing stocks, which is Alphabet, not D-Wave Quantum or IonQ [1][5] - Prior to Q3 2025, Amazon was the only quantum computing stock in Berkshire's portfolio, but the conglomerate has now invested significantly in Alphabet [3][5] Company Investments - Berkshire Hathaway purchased over 17.8 million Class A shares of Alphabet, valued at more than $5 billion, which is more than double its investment in Amazon [5] - Alphabet's Google Quantum AI is a leader in quantum computing, having achieved significant milestones, including a calculation that would take supercomputers 10,000 years to complete in just 200 seconds [6] Business Focus - The investment in Alphabet is likely driven more by its robust advertising business rather than its quantum computing initiatives, as evidenced by the $74.2 billion revenue generated from advertising in Q3 2025 [8][9]

Core Insights - Berkshire Hathaway is preparing for a leadership transition as Warren Buffett will pass the CEO role to Greg Abel, with the latest quarterly regulatory filing being the last under Buffett's tenure [1] - Despite being a net seller of stocks, Berkshire made nine notable purchases in Q3, with Alphabet being the standout acquisition [2][3] Berkshire's Q3 Purchases - The largest purchase was over 17.8 million shares of Alphabet, valued at approximately $4.3 billion, indicating a significant investment in the tech giant [3] - Berkshire also increased its stake in Chubb by nearly 4.3 million shares and raised its position in Domino's Pizza by about 13.2% [4] - Additional purchases included 32,603 shares of Lamar Advertising and increased stakes in Lennar Class A and B shares for the second consecutive quarter [5] - Sirius XM Holdings saw a 4.2% increase in Berkshire's position, highlighting its growing favor among Buffett's team [6] Performance of Acquired Stocks - Alphabet's shares have surged around 50% year-to-date, benefiting from a strong AI tailwind, particularly through its Google Cloud unit [8] - Mitsubishi has also performed well, nearly matching Alphabet's growth in 2025 [9] - Sirius XM leads in income generation with a forward dividend yield of 5%, while Lamar Advertising follows closely with a yield of 4.8% [12] Long-term Outlook - Although Sirius XM ranks highly in certain metrics, Alphabet is expected to be the biggest long-term winner due to the anticipated continued growth in AI and its leadership in the robotaxi market through Waymo [13][14] - Alphabet's potential in the smart glasses market and advancements in quantum computing further position it for significant future growth [14] - While Alphabet may not be the cheapest stock or offer the highest dividends among Berkshire's recent purchases, it represents a strong addition to the portfolio [15]

Core Insights - The article discusses the investment interests of billionaires in quantum computing, specifically highlighting their stakes in two major companies, Alphabet and Amazon, rather than smaller quantum computing firms [1][3]. Group 1: Investment Focus - Billionaires Bill Ackman, Israel Englander, and David Tepper have invested in Alphabet and Amazon, which are recognized as leaders in quantum computing among other sectors [1][3]. - Ackman's Pershing Square Capital Management holds only 12 stocks, including two classes of Alphabet shares and Amazon, while Englander's Millennium Management has a diversified portfolio with 3,928 holdings, also including Alphabet and Amazon [4][5]. - Tepper's Appaloosa hedge fund owns 38 stocks, with Alphabet and Amazon being among the top positions [5]. Group 2: Quantum Computing Developments - Alphabet's Google Quantum AI has achieved "verifiable quantum advantage" with its Willow quantum chip, marking a significant milestone in quantum computing [7]. - Amazon Web Services (AWS) introduced the Ocelot quantum computing chip, which can reduce quantum error correction costs by up to 90%, potentially accelerating the development of practical quantum applications [8]. Group 3: Broader Business Context - Both Alphabet and Amazon are not solely focused on quantum computing; they are also leaders in cloud services and artificial intelligence, with AWS being the top cloud provider and Google Cloud growing rapidly [9]. - Alphabet dominates the search engine market, while Amazon leads in e-commerce, indicating strong core business performance alongside their quantum computing initiatives [10]. - The companies are exploring new markets, such as Alphabet's Waymo in the robotaxi sector and Amazon's upcoming satellite internet service through Project Kuiper, which could further enhance their growth prospects [14].

Core Insights - Quantum computing is in its early stages and has the potential to revolutionize multiple industries, with McKinsey projecting the market size could reach $131 billion by 2040 [1][2]. Established Leaders - Microsoft, with a market cap of approximately $3.7 trillion, is heavily investing in quantum computing, developing the Majorana 1 quantum processor using a new type of material [5][6]. - Alphabet, through its Google Quantum AI division, has achieved significant milestones in quantum computing and aims to develop a practical error-corrected quantum computer within the decade [7][8]. - IBM is committed to delivering the world's first large-scale, fault-tolerant quantum computer by 2029, maintaining its status as a major player in the tech industry [8]. Rising Stars - IonQ is recognized as a promising leader in quantum computing, offering hardware available on major cloud platforms and has an ambitious roadmap for powerful quantum computers [10][11]. - D-Wave Quantum, the first commercial quantum computing company, has a strong customer base and its Advantage2 quantum processing unit is among the most powerful superconducting quantum computers [12]. - Rigetti Computing and Quantum Computing Inc. are also noted for their advancements, with Rigetti demonstrating a large multi-chip quantum computer and Quantum Computing Inc. focusing on energy-efficient quantum solutions [13]. Alternative Investment Approaches - Investing in established companies like Microsoft, Alphabet, and IBM offers a less risky approach to quantum computing [14]. - "Pick-and-shovel" investments, such as Nvidia, which integrates AI supercomputers with quantum hardware, present another angle for investors [15]. - Smaller companies like Arqit Quantum, which develops encryption platforms against quantum attacks, may also be intriguing for aggressive investors [16].

Core Insights - Alphabet is predicted to surpass the combined market cap of Berkshire Hathaway, Palantir, and Tesla by 2030, driven by its advancements in quantum computing and cloud services [2][4][5]. Company Analysis - Alphabet's current market cap is approximately $2.3 trillion, slightly below the combined market cap of its competitors, which totals around $2.4 trillion [5]. - The company is expected to achieve strong growth, particularly through its Google Cloud segment, which reported a 32% year-over-year revenue increase in Q2 2025, the highest among major cloud providers [10]. - Alphabet's advertising platforms, including Google Search and YouTube, are anticipated to maintain their market dominance despite concerns regarding generative AI [11]. Quantum Computing Potential - Alphabet is recognized for its quantum computing initiatives, having achieved two out of six milestones on its quantum computing roadmap, with the goal of building a useful quantum computer within the decade [9]. - The success of Alphabet's Waymo unit in the self-driving car market is expected to contribute positively to its growth trajectory [12]. Competitive Landscape - Berkshire Hathaway's potential for a significant acquisition under new CEO Greg Abel could pose a risk to Alphabet's growth prediction, although it is believed that Abel will avoid high-risk moves early in his tenure [6]. - Palantir's high valuation, with a forward price-to-earnings ratio of nearly 278, raises concerns about its growth justifying this premium [7]. - Tesla faces increasing competition in the electric vehicle market, which may hinder its growth and market cap projections [8]. Regulatory Considerations - Antitrust actions against Google could impact Alphabet's growth, but the legal process is expected to take years, and the company is appealing unfavorable rulings [13].

Core Insights - Quantum computing is a rapidly advancing technology based on quantum mechanics, which remains complex and not fully understood [2] - Warren Buffett, despite his philosophy of not investing in businesses he cannot understand, has indirect investments in quantum computing through Alphabet, IBM, and Microsoft [2] Company Summaries - **Alphabet**: The company has made significant strides in quantum computing, achieving quantum supremacy in 2019 and advancing in quantum error correction in 2023. It has a roadmap with four more milestones to reach practical applications in about five years [5][6] - **IBM**: IBM has been working on quantum computing since 2016 and has a clear roadmap since 2020. The company claims it will be capable of running quantum programs at a large scale by the end of the decade, positioning itself as a leader in fault-tolerant quantum computing [7][8] - **Microsoft**: Microsoft maintains a stake in quantum computing and has introduced the Majorana 1 quantum chip, which is expected to solve significant industrial problems in the near future. The company is also integrating AI technologies, which could drive substantial growth [9][11] Industry Context - The quantum computing sector is seen as a wild card for the future of these companies, despite the complexities involved in the technology [12] - AI is a transformative factor for Alphabet, IBM, and Microsoft, with each company leveraging AI to enhance their cloud services and product offerings [10][11]