Best Quantum Computing Stocks of 2025 – Google Stock’s BIG BREAKTHROUGH
Hey everyone, welcome back to Chip Stock investor today. We're going to be talking about quantum computing. Yeah.
And our top quantum computing stocks of 2025, we're going to refresh this from the video we did back in May, 2024, and hopefully make this topic, make some sense. It's not going to make any sense. No, it's not.
It's quantum computing, which doesn't make any sense. It doesn't make any sense at all. But it, it, it's starting to work, as Google showed the world here recently.
Let's talk about that, but first, Kasey, let's introduce the people at home what quantum computing is, there's an extra layer to it versus traditional computing. You may recognize these items from what actually makes up the computing portion, the networking portion and the storage portion of the computing system. But the extra added ingredient is actually really important for quantum computing. You can see that's number four sensors, highly sensitive instruments used to detect and record quantum mechanical effects.
Why is that different? Well, qubits are significantly different than bits of data. So what are bits versus qubits? You can find our video from back in May to get more in depth on this topic, but in basic terms, bits in classical computing, what we use everyday, in your PC, your smartphone, pretty much every electronic device that has any computing in it whatsoever, uses these little ones and zeros, which are created by the on off electrical switches on a processor called transistors. The most advanced chips these days, like NVIDIA's accelerated computing systems, those GPU chips may have billions and billions of transistors on them, meaning lots of ones and zeros that can be collected, recorded, processed, moved, stored, so on and so forth. Quantum computing, by contrast, doesn't use the same binary code that arises from these on off switches and the flow of electricity through them. Quantum computers take measurements at the subatomic level, particles smaller than atoms.
And at this level, these tiny particles exhibit very strange behavior. And the various states of these particles, uh, because we're dealing in probabilities at this very, very tiny microscopic level, not hard and fast on or off binary one or zero, they can embed more data, encode more data by taking these measurements in the quantum realm, so to speak. So these measurements are taken using what's called a qubit, the equivalent of a classical computer transistor and the bits that they create. If you want to see what that looks like, check out Ant Man at the quantum realm. Nobody watched it, but Disney's paying me to tell you about it right now.
No, we are not taking Disney money. Save yourself a couple hours and skip the last Ant Man movie, actually. I think it lends to the discussion. Okay.
So let's talk about Google's new quantum computing breakthrough, Kasey, tell us about it. If you have been following Google's Quantum AI program, you may know that they've been taking a full stack approach to quantum computing. That means they are designing the hardware and then manufacturing the hardware, and they're also working on the software algorithms, which will eventually maybe govern quantum computing. Does that sound familiar to you? Yeah.
Full stack approach, that's what NVIDIA more or less has done with accelerated computing minus of course the manufacturing part, but yeah, that full stack computing, uh, hardware to software is what this is in reference to this is the photo that Google released with their announcement of this Willow chip, their new quantum AI chip Google's Quantum AI is located in Santa Barbara. This is a picture of the beautiful central coast of California. We'll come back to that portion about Santa Barbara here in just a moment. Not such a beautiful place. Recommend skipping that as well.
Skip Ant Man, skip Santa Barbara and California central coast. I don't agree with that statement. Okay, so in the press release, Google also had an accompanying video explaining the roadmap that got them here.
They've actually had several chips that they've developed over the years, Foxtail, Bristlecone, and Sycamore in 2019. And if you recall in 2019, with the release of that Sycamore chip, Google actually reached a notable milestone. You can see in Google Quantum AI's roadmap here in 2019 with the release of that Sycamore chip, they were able to achieve, computing speeds that were beyond what a classical supercomputer is capable of. Now, a milestone that everyone has been working on since then is error correction. That includes NVIDIA and their accelerated systems, which are being used on the error correction, because quantum computers are so sensitive to environmental effects, uh, there are lots of false readings in, in those qubits.
And so a lot of computing power is needed to correct those readings and make calculations that are ultimately useful in the development of algorithms, and eventually. software. So now we're at milestone three on this roadmap to getting to an actually useful quantum computer, that's commercially viable. Milestone three is a long lived logical qubit, which helps with the sensors being able to accurately read and measure quantum effects.
This is known as quantum coherence and Willow is a big leap in the long lived qubit milestone. In tandem with that, Google is scaling up the number of qubits on the qubit grid for Willow. That begs the question though, how are these quantum chips made? To answer that question, it may lead you to some top quantum computing stock you may want to own right now. Let's walk through some of the steps in the process that might be familiar to you, if you've been following the progression of classical computing chips. Fabrication, packaging, and wiring.
Okay. Let's start with that step. It starts at step number three that you can find in the press release for the Willow chip, the other parts of this discussion that Google has laid out here, but we're going to focus just on the chip itself because we are Chip Stock Investor. So the fabrication.
So as Kasey mentioned, Google actually. Just opened its own quantum computing chip making center at their lab in Santa Barbara, California. Let me repeat that again and let this sink in. Google quantum AI actually owns its own chip making fab in Santa Barbara, California. So when making the Willow chip, Google said that it deposited aluminum onto silicon wafers.
This is an important thing to note here because the special shape. Of the aluminum design is the qubit itself. That is what creates the quantum effect that is measured by those sensors to create the bits of code in the quantum computer. This is a picture here of some of those Willow chips first on the wafer, and then the qubits printed onto the chip using aluminum and beginning to be packaged onto the ultimate device.
So I mentioned the aluminum design on that chip is the qubit itself. How does it produce a quantum effect that gets measured? So that quantum effect is created and measured by lowering the chip down to nearly zero Kelvin. And actually aluminum becomes a superconductor at this temperature. And that's why Google and other startups call their tech superconducting quantum computers versus other methods like IonQ's, trapped ion quantum computer.
And this is different because unlike transistors that can actually be shrunk down to increase computing power, qubits on a quantum chip are fixed in size. The manufacturing equipment necessary for these isn't likely as advanced. As some of the chips that are seen with classical computing.
Yeah, this is a really interesting difference. Uh, so the power of the computer itself, at least in Google's case is these refrigerators, basically very complex, high powered refrigerators, that progressively lower the temperature all the way down to close to that absolute zero, zero kelvin, and then that qubit chip, the Willow chip, located at the very bottom of the last stage of the fridge. The picture that you see here, we took from our May presentation, These particular fridges are made by a company called Form Factor, ticker symbol F O R M. They do a lot of other stuff in the semiconductor industry, the quantum computing refrigerators are just one of many things, so it's not a pure play on quantum computing.
Anyways, put that off to the side here for just a moment. You may be wondering what all of those small wires are connecting all these different layers of that, essentially a refrigerator. Besides some of these connectors or tubes delivering refrigerant, these wires are part of a network and that's how researchers send and receive commands and data from the quantum chip. So all of this sounds really cool, really amazing. It sounds like we're ready to leap into the quantum realm. Uh, Ant Man again, and then again, you have to stop.
You have to stop. It's true. It's true. Let's just go with Avengers, the last Avengers movie. I think that's, that's better.
I need, it's true. I need a better quantum realm reference. Okay, so ultimately all aboard the Ion Q train, right? Okay. Uh, careful there. Maybe that's all we need to say. Be careful with that one.
Uh, that's probably a different topic for a different time. A different type of quantum computing technology that also is showing admittedly a great deal of promise, but remember, all of those milestones that we talked about that, that Google outlined for us earlier, there are still a number of them left that need to be achieved so that we can reach this intersection in the top right quadrant of this chart that you see right here, beyond classical applications. That's the key word here. Applications. This is the intersection between.
A very difficult problem, a very difficult math algorithm that can be solved, that's the y axis on the left. And something that's actually useful for human society. That's the x axis that stretches off to the right.
Not just research, not just really cool algorithms in a lab. So at that intersection, really difficult problems and viability, actual usefulness. So in the meantime, that's what we're waiting for.
All of these quantum computing companies, yes, they are making progress. Google Quantum AI, IonQ, uh, and others are working on this, but where's a good place to invest while we wait for this beyond classical application that actually contributes to the economy? Before we talk about those companies word from today's sponsor public. com. The new bond account at public.
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So check out the link in our description below public. com forward slash CSI to get your bond account open today. Okay, we're back to the companies that are aiding in the development of what could eventually be the quantum computing industry. Let's let's call it future quantum computing industry right now.
It is very much just in research and development phase. And much like the old semiconductor industry, there are some key companies involved in R and D work. Yes. Some companies in the fab five have been quietly working on the chemistry needed to manufacture those qubits. Applied Materials, number two on our list here is the leader in chemistry and materials science.
And that seems like an especially good fit for quantum computing. Here's our manufacturing flow for the classic computing industry. Many of these steps are going to be completely unnecessary for a quantum chip, but other new processes are most likely going to need to be developed. Given that Google said that they were depositing aluminum on silicon, it seems that some sort of deposition equipment, certainly etch, and definitely metrology are being used in their fab to make these Willow chips. And of course, Kasey, you mentioned deposition. Applied Materials has extensive equipment for all these steps, including deposition.
In fact, that's an Applied Materials specialty is deposition equipment. One of my favorite quotes from the last year, Asianometry said that if Applied Materials had it their way, everybody would be buttering their toast with deposition equipment. Pretty, pretty witty.
Okay, and deposition, if you don't know, is the depositing of materials onto a silicon wafer. So, in this case, uh, physical vapor deposition, one of the many metallic and other related materials that can be deposited onto silicon with Applied Materials equipment is aluminum, and aluminum nitride. So we don't know if Applied Materials supplied equipment to Google's fab or not, but it seems likely that these companies are helping develop some of these new processes that will be needed to eventually manufacturing these chips if we reach a point where they're economically viable an useful. I also mentioned metrology, the science of measuring stuff, Applied Materials also has lots of equipment that falls into that category. And it's also a leader in chip packaging, which we can focus on next. Although some of the packaging is being done by hand, as you can see in the video from Google's Quantum AI lab, this clip from the video, Anthony Nguyen, a quantum packaging engineer showing just how small these wires are connecting the quantum chip.
So a lot of these packaging processes happening are being done manually. There is some equipment involved though. So in the clip from Google, you can see the engineers threading those wires into the machine.
And then here's a snapshot of the machine actually packaging that Willow chip onto a circuit board and into the special housing that's needed to make that chip close to zero Kelvin or what the engineers in the video called a cold, dark, and quiet. Devoid of any environmental interference so that those quantum effects can be accurately measured by the quantum computer and sent back to the team collecting the long string of bits that result from it. This process is all being done within Google's quantum AI lab.
It's really fascinating. It's emulating that old IDM model of the chip industry like Intel that spans research and development, design, manufacture, and device packaging all in one place. Google could be among a lot of other things that make it a great long term core portfolio, holding a future quantum chip IDM. Is it the next Intel in the making? Way too soon to tell, but it is fascinating to see that. Old model sort of get resurrected here, perhaps at the cusp of new breakthroughs in the technology industry. Also kind of odd to be talking about this, even as accelerated computing is kind of the new next thing in computing, but again, topic for a different video.
Let's go back to the manufacturing equipment itself though. Don't write off Applied Materials and the fab five. Wherever the chip industry heads in the coming decades, it could be as applied materials has talked about recently, lots of more development and accelerated computing and reducing the energy consumption of those new accelerated computing systems. Or if we head off into, a new quantum future, Applied Materials has been quietly supporting this new part of the industry as well for years. Here's a news release from 2019 and they've been continuing on this front here to just this past summer of 2024, they had another open innovation workshop on quantum computing technology. A bunch of technologists and researchers and scientists, talking about a lot of the materials innovations that will be needed to help make quantum computing a reality, including new processes needed to make these chips with the qubits on them.
Where else could you invest, if you want to do invest in quantum computing? Rigetti shot higher on the Google Willow chip announcement. Why? Well, Rigetti is one of the other rare dedicated quantum chip fabs. Researchers can submit their designs to Rigetti to have their chips made, or they can utilize, pre designed ones from that company.
It seems that Google's quantum IDM proof of concept sent Wall Street into a highly speculative what if mood for Rigetti, which has struggled since it's SPAC IPO. Yeah, much like IonQ, uh, maybe, maybe not to the same extent as IonQ. IonQ has actually been picking up a lot of research and development projects, especially through government entities working on who knows what, but much like Google still very much in the early stages of getting these things to be actually useful and accurate. But Rigetti the special thing about it is this dedicated fab. So perhaps many investors are betting on this becoming, maybe some sort of base level supporter of a quantum computing industry because of that fab, much like what Google built. In Santa Barbara.
Hard to say at this point, but be careful with these companies, folks. These are highly speculative businesses that make very little revenue. And as a result are very, very unprofitable right now.
Besides Applied Materials, we also presented two other picks back in our May, 2024 video Skywater technology and Allegro microsystems Skywater does some quantum chip manufacturing as part of its startup third party chip fab for other startups and Allegro, which we recently did a video on. We'll put the link right here. Allegro makes a new type of sensor that also can tap into the quantum realm. These three companies could certainly be far better options than the ultra high speculation stocks like IonQ and Rigetti. Those two companies basically only make revenue from, other companies, R and D budgets. Yeah, and it's not to say that you should ignore companies like IonQ and Rigetti Computing, but just be careful about chasing those stocks after they make really, really big run ups like they have in recent months on some of these new rumblings of a quantum computing breakthrough forthcoming and then Google actually, you know, coming out and saying, in fact, we have made a new breakthrough with the Willow chip.
So in, in the meantime, really just we want to hammer this home. There's, there's a lot of talk out there again, like there was in 2021 and 2022 that, you know, quantum computing is making great progress, you need to get into these companies now before they become you the next whatever tech tech giant, but we are still years away, many years away from not only a scaled up error corrected quantum computer, you know, works makes accurate readings and also can operate algorithms and actual software that has a use case. We're years away from that happening. So in the meantime, if you're looking for a more stable bet, you might just want to stick with Alphabet stock, which includes Google Other Bets, one of the revenue line items, Waymo gets a lot of attention, the self driving car startup, some of the health technology going on in Google's Other Bets, but Google Quantum AI is also housed in this Other Bet segment. Here's a chart from our friends at Finchat.
io showing this Google bets segment. The blue bar is the revenue, collective revenue for all of these small startup businesses. The orange is the operating loss. You can see the operating loss is gradually narrowing over time, over the last five years, but still pretty sizable every quarter, over a billion dollars in operating loss every quarter.
That is chump change for a company like Google. It's not chump change for some of these startups that are also burning through lots of cash in, in doing the R and D work, but for Google, they can very much afford this, and that's a good thing. For you as an investor, if you're looking at betting on the development of the stuff over the course of the next five to 10 years, despite a lot of noise this year, Google stock has been a market beating investment once again, and we really do not see that changing anytime soon, Quantum AI and quantum research in general, may ultimately be a waste of money.
We don't know yet at this point, we are still years away from actual commercialization of being able to use these tools from quantum researchers, curb your enthusiasm, take it easy. But if it's not a waste of money in the longterm, Google appears to be one of the leading pioneers in this field. And it's got an interesting model, sort of like the old, semiconductor industry model at the advent of the whole computing industry back in the seventies. They do the research, they do the design, they do the manufacturing and they're working on the software itself.
Pretty cool stuff. We're happy owning Google stock in 2025. Thanks everybody for watching this video. Take a look at our Semiconductor Insider membership.
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2024-12-24 18:39
