Quantum computing is poised to evolve today’s technology in groundbreaking ways.
A diversified quantum computing portfolio is a sound strategy, given the tech's nascent stage.
Three companies providing quantum industry diversification are IBM, Palo Alto Networks, and IonQ.
Artificial intelligence is transforming industries, yet a greater technological revolution is approaching, called quantum computing. These machines harness the distinct properties of quantum mechanics to quickly complete calculations too complex for the most powerful supercomputers on the planet.
Such potent computational capabilities have many implications for society, such as the discovery of new medicines, but the tech is still nascent. Consequently, not every business in the industry is destined for success. So at this stage, a prudent strategy is to invest in a mix of companies working in the space.
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For a diversified investment in quantum computing, consider these three leading companies: International Business Machines (NYSE: IBM), Palo Alto Networks (NASDAQ: PANW), and IonQ (NYSE: IONQ). Each brings unique strengths to the field, offering well-rounded exposure to this budding technology.
In its long history, IBM has pioneered a number of technologies. Quantum computing is among the latest. Big Blue was the first to put a quantum device in the cloud back in 2016. It also owns Qiskit, the world's most widely used quantum computing software, according to the company.
IBM stands out among stocks in the industry to buy this year because the company anticipates achieving quantum advantage by the end of next year. Quantum advantage is the point at which a quantum machine surpasses supercomputers in efficiently solving practical, real-world problems.
The emergence of quantum devices capable of accomplishing this breakthrough marks a pivotal moment. At this juncture, quantum computers finally can rival today's advanced computers, and eventually, may replace them.
Another reason to consider Big Blue's stock is the company's solid free cash flow (FCF), which gives it the deep pockets to invest in quantum technology. Through the first half of 2025, it produced FCF of $4.8 billion, up from $4.5 billion in 2024. IBM's FCF also allows it to pay a robust dividend for a tech company, yielding over 2%.
Quantum machines are so powerful, they can hack through most of the existing cybersecurity in the world. This means Palo Alto Networks plays a critical role in the quantum computing ecosystem.
The cybersecurity company collaborated with quantum computing companies, such as Quantinuum, to build post-quantum cryptography (PQC), capable of repelling quantum-enabled attacks. This year, Palo Alto Networks released PQC products in advance of the anticipated arrival of quantum advantage.
Along with defenses such as a quantum-optimized firewall, these tools include a dashboard outlining an organization's readiness to defend against quantum assaults. This is a smart way to raise awareness of the upcoming threat, and grow product adoption.
The PQC solutions strengthen the company's cybersecurity platform, which is already selling well. Thanks to its existing offerings, Palo Alto Networks generated strong sales of $9.2 billion in its 2025 fiscal year, ended July 31.
This represented an excellent 15% year-over-year revenue increase. The company anticipates a near-repeat performance in its 2026 fiscal year with a forecast of 14% year-over-year sales growth.
A final quantum computing stock to consider for 2025 is relative newcomer IonQ. The company launched its first quantum device in 2017. As the industry steadily approached quantum advantage over the past year, investor awareness swelled. This helped IonQ shares to soar more than 80% in 2025 alone through Oct. 14.
IonQ uses vastly different technology from IBM. While Big Blue's quantum solutions require specialized cryogenic equipment, IonQ's tech can operate at room temperature. The feature is key to cost-efficient quantum computers, and as a result, IonQ estimates competitors are spending 30 times more for their equipment.
The company aspires to construct the internet of the future, one built on quantum networks. To that end, it went on an acquisition spree, gobbling up smaller players in the space to strengthen its technology.
IonQ can afford it after amassing $1.7 billion in cash and equivalents with no debt as of Sept. 12. The company seeks to add to its cash hoard with a $2 billion equity offering announced in October.
The company's technology has been embraced by governments and businesses. Consequently, the company achieved $43.1 million in 2024 revenue, nearly double the prior year's $22 million. It forecasts 2025 sales to reach between $82 million and $100 million.
IonQ possesses compelling qualities to succeed in quantum computing, but note that its share price valuation is sky-high with a price-to-sales (P/S) ratio over 300. In contrast, Palo Alto Networks has a P/S multiple of 16, and IBM's is an attractive 4. Therefore, IonQ stock is only for investors with a high risk tolerance, and it may be best to wait for the price to dip before deciding to buy.
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Robert Izquierdo has positions in International Business Machines, IonQ, and Palo Alto Networks. The Motley Fool has positions in and recommends International Business Machines. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.