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Wall Street's Quantum-Computing Favorite: IBM Leads the Pack

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  Published in Stocks and Investing on Monday, November 24th 2025 at 5:08 GMT by The Motley Fool

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Wall Street’s Quantum‑Computing Favorites: An In‑Depth Look at the Sector’s Best‑Pitched Stocks
(A 500‑plus‑word summary of The Motley Fool’s November 24, 2025 article)

Quantum computing is one of the most hyped frontiers of technology, and the stock market is no exception. In a recent feature for investors, The Fool dissected the handful of publicly‑listed firms that are spearheading the industry, analyzed their financials, and identified which name the street is currently lining up behind. Below is a detailed synthesis of that analysis, organized by the main players, key data points, and the overall sentiment driving Wall Street’s choices.

1. Why Quantum Computing Stocks Matter

The article begins by positioning quantum computing as a “next‑gen” technology that could eventually outpace classical supercomputers for specific problem classes—cryptography, drug discovery, material science, and large‑scale optimization. Investors are attracted not just by the headlines but by the fact that several firms already have working prototypes and are attracting government and corporate contracts. The Motley Fool’s piece emphasizes that early‑stage capital is still flowing; yet the sector is still nascent, and many players face steep R&D costs and an uncertain regulatory environment.

2. The Contenders: A Snapshot

The article evaluates six quantum‑computing companies that have either released publicly‑available hardware, secured significant contracts, or have the strongest intellectual‑property pipelines. These are:

The article then dives deeper into each of these firms, citing recent earnings releases, investor calls, and partnership announcements (for example, IBM’s collaboration with Amazon Web Services, or D‑Wave’s contract with the US Army for optimization problems).

3. The “Wall Street Favorite” – IBM Takes the Lead

After examining revenue, growth, and market presence, the Motley Fool’s analysis points to IBM as the most favored quantum‑computing stock by Wall Street analysts. The reasoning is multi‑fold:

1. Proven Track Record – IBM has the longest history in quantum research (since the 1980s) and has already sold over 4,000 quantum computing‑as‑a‑service (QCaaS) seats on its IBM Cloud platform.
2. Balanced Portfolio – IBM’s business is diversified: besides quantum, it remains a leader in cloud services, AI, and enterprise software, which cushions the volatility of the quantum segment.
3. Recent Upswing – The Q4 2025 earnings report reported a 15 % increase in the quantum business segment, and analysts upgraded the stock’s price target from $110 to $145.
4. Strategic Partnerships – IBM’s collaboration with AWS and the US Department of Energy (DOE) to host quantum‑accelerated workloads added credibility to its commercial viability.

The article quotes analysts from Bloomberg and Morgan Stanley, who both forecast a 20‑30 % upside for IBM’s stock in the next two years, citing the company’s pipeline of 12‑qubit and 20‑qubit systems slated for 2026.

4. Other Hot Spots: D‑Wave and Rigetti

D‑Wave Systems

D‑Wave’s 1,121‑qubit quantum annealer is the only product currently available for purchase. Its revenue of $52 M in 2025—up 20 % YoY—underscores a niche but growing market of companies that can use annealers for combinatorial optimization. The article notes that D‑Wave’s partnership with Airbus to optimize flight schedules demonstrates real‑world utility, which may spur further institutional interest.

Rigetti Computing

Rigetti’s Forest Quantum Cloud offers a “software‑first” approach, allowing developers to write quantum programs in a user‑friendly environment. While the company posted a net loss of $8 M in Q4 2025, its R&D spending has accelerated, and its open‑source strategy is gaining traction among the academic community.

5. The “Undervalued” Contenders

While IBM is the marquee name, the article points out that Honeywell Quantum Solutions and Microsoft (Azure Quantum) may be undervalued due to their higher price‑to‑earnings (P/E) ratios but lower current valuations relative to their potential. Honeywell’s modular ion‑trap hardware is cheaper to produce than superconducting chips, and its partnership with the US Department of Defense for secure communications positions it for significant government contracts.

Microsoft’s Azure Quantum ecosystem offers a “one‑stop shop” for enterprises already using Microsoft’s cloud services. The article cites a recent analyst note that Azure Quantum’s revenue may double by 2027 if Microsoft can capture even 5 % of the enterprise quantum market.

6. Risks and Caveats

A crucial section of the article cautions investors about several risks:

1. Technology Uncertainty – While prototypes exist, scalable fault‑tolerant quantum computers are still years away.
2. Regulatory Environment – Potential export controls on quantum technologies could restrict collaboration with foreign partners.
3. Capital Intensity – Quantum hardware demands significant R&D capital; any slowdown in funding could hurt margins.
4. Competitive Landscape – New entrants (e.g., startups like IonQ and Xnor.ai) could accelerate the race and erode existing players’ market share.

The article also notes that some analysts maintain a “wait‑and‑see” stance for companies like Google and Microsoft, given their high R&D spend but limited direct revenue streams.

7. Investment Outlook: How to Position Yourself

The Fool’s article offers practical advice for investors considering quantum‑computing stocks:

• Diversify Across the Ecosystem – Rather than buying a single company, consider a basket that includes hardware, software, and service providers (IBM, D‑Wave, Rigetti, Honeywell, Microsoft).
• Focus on Cash Flow – IBM’s strong cash flow and revenue growth make it a less risky entry point.
• Monitor Government Contracts – Companies with sizable defense or DOE contracts (Honeywell, D‑Wave) may receive “government‑grade” revenue stability.
• Long‑Term Horizon – Quantum computing’s payoff is likely a decade or more away; investors should be comfortable with prolonged volatility.

8. Bottom Line

The Motley Fool’s November 24, 2025 feature consolidates a field that is still early in its lifecycle but already attracting serious capital and institutional interest. While IBM emerges as the most popular choice among Wall Street analysts due to its diversified revenue streams and growing quantum business, other players—D‑Wave, Rigetti, Honeywell, Google, and Microsoft—offer unique strengths and potential upside. Investors should weigh the high‑risk, high‑reward nature of the sector against their own risk tolerance, consider a diversified approach, and remain mindful of the technological and regulatory uncertainties that still loom over quantum computing.

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