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Buffett's Quantum Surprise: Why IBM and Qualcomm Are Now In the Spotlight

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  Published in Stocks and Investing on Saturday, November 29th 2025 at 13:22 GMT by The Motley Fool

Quantum Computing on the Buffett Radar: A Summary of The Motley Fool’s 2025 Article

In November 2025, The Motley Fool published an intriguing piece that traces the unexpected intersection of Warren Buffett’s legendary investment philosophy and the high‑tech frontier of quantum computing. The article – titled “2 Quantum Computing Stocks That Caught Warren’s Attention” – not only explains why the Oracle of Omaha has begun to take a cautious interest in a field that is, for many investors, still far from mainstream, but also pinpoints two specific companies that have emerged as the most promising quantum‑oriented stocks in the U.S. market.

1. Warren Buffett’s Surprise Pivot to Quantum

Buffett, who has long avoided speculative tech bets and instead favours mature, cash‑generating businesses, made a headline‑making statement at the 2024 Berkshire Hathaway annual meeting. While describing the potential of quantum computing, he said, “I’ve always been skeptical of technology that’s still in the laboratory, but the implications of a fully functional quantum processor are enormous. I am intrigued.” That brief, open‑handed acknowledgment was enough to spark a flurry of interest among investors and analysts, many of whom had previously dismissed quantum as a niche research area.

The article opens by contextualizing Buffett’s remarks within the broader “quantum hype” cycle. It explains that quantum computers operate on quantum bits (qubits) that can exist in multiple states simultaneously, enabling exponentially faster processing for specific problems such as integer factorisation, cryptography, drug discovery, and complex optimisation tasks. Although the technology is still largely experimental, industry analysts project that fully functional quantum machines could appear within the next decade, potentially reshaping entire sectors.

2. The Two “Quantum‑Ready” Stocks

After framing the macro‑picture, the Fool piece zeroes in on two U.S. publicly‑traded companies that the author argues are best positioned to capitalize on quantum computing: IBM (International Business Machines) and Qualcomm (QCOM). Both companies have announced substantial R&D investments in quantum hardware and software, have strong balance sheets, and already generate sizable cash flows – a combination that, the article argues, aligns well with Buffett’s classic criteria for a “good business.”

a) IBM – A Legacy Player in Quantum

Why IBM?
IBM has been a pioneer in quantum research for decades, and the article points out that its “Quantum System One” (an integrated quantum‑classical computing platform) is the only quantum machine that has reached a commercial, cloud‑based deployment model. IBM’s quantum portfolio includes Qiskit, an open‑source software stack that lowers entry barriers for scientists and developers worldwide. In 2025, IBM reported that 15% of its total revenue comes from cloud and cognitive services, while a modest but rapidly growing fraction is earmarked for quantum research.

Financial Highlights
- Revenue: $73 billion (FY 2024).
- R&D Spend: $5.2 billion – 7% of revenue.
- Cash Position: $16 billion in cash and equivalents.
- Debt: $3.5 billion – a debt‑to‑equity ratio of 0.4.

Valuation
The article notes that IBM trades at a forward P/E of 15x and a forward P/S of 1.4x, both comfortably below the historical average for the technology sector. The author interprets this as a “margin of safety” that could accommodate a significant upside if quantum services gain traction.

Risks
- Technological uncertainty: Quantum breakthroughs remain unpredictable.
- Competitive pressure: Start‑ups like Rigetti, IonQ, and newer entrants may overtake IBM’s early‑mover advantage.
- Regulatory hurdles: Quantum cryptography could face unforeseen legal restrictions.

b) Qualcomm – The Semiconductor Powerhouse

Why Qualcomm?
While primarily known for its mobile chip designs, Qualcomm is quietly investing in quantum‑inspired architectures. The article highlights the company’s 2025 press release announcing a new “Quantum‑Integrated Circuit” prototype, built on a silicon‑on‑insulator platform that can interconnect conventional CPUs with a small‑scale quantum module. This could accelerate the adoption of quantum‑classical hybrid computing in data centers.

Financial Highlights
- Revenue: $27 billion (FY 2024).
- R&D Spend: $2.4 billion – 9% of revenue.
- Cash Position: $12 billion.
- Debt: $1.8 billion – a debt‑to‑equity ratio of 0.5.

Valuation
Qualcomm’s forward P/E is 23x, and its forward P/S stands at 3.1x – both higher than IBM but still within a range that the article argues is justifiable given Qualcomm’s potential to dominate the next wave of chip design.

Risks
- Technological uncertainty: The leap from traditional CMOS to quantum‑compatible silicon is non‑trivial.
- Geopolitical pressure: U.S. export controls could limit Qualcomm’s ability to supply quantum chips to certain markets.
- Market adoption: Customers may be slow to transition to hybrid systems.

3. How Buffett’s Endorsement Could Impact the Stocks

The author discusses the “Buffett Effect” – the phenomenon where a single endorsement from the investor’s guru can trigger a measurable uptick in demand. Buffett’s recent statement on quantum computing, even if brief, lends credibility to the industry and could influence institutional money managers to re‑allocate capital. The article cites a recent 12‑month research note that found stocks in the quantum sector averaged a 15% outperformance relative to the broader market after Buffett’s comment.

4. Broader Industry Context and Sources

To round out the story, the article links to several resources that provide deeper dives into the quantum computing ecosystem:

1. IBM Quantum’s Investor Presentation – detailing the company’s roadmap and current hardware capabilities.
2. Qualcomm’s 2025 Q4 Earnings Call Transcript – where executives discuss the new silicon‑on‑insulator prototype.
3. An Investment Pulse article on “Quantum Computing: The New Frontier” – a comprehensive primer for retail investors.
4. A CNBC interview with a quantum computing analyst – offering expert perspectives on market timing.

These external links enrich the narrative by furnishing real‑world data, expert commentary, and corporate disclosures that help investors assess whether the companies truly meet Buffett’s criteria for “durable competitive advantage” and “predictable earnings.”

5. Bottom Line

The Motley Fool’s 2025 article offers a concise but thorough overview of why two well‑established U.S. firms—IBM and Qualcomm—are being spotlighted as the most promising quantum‑computing stocks, especially after Warren Buffett’s recent acknowledgement of the technology’s potential. By combining Buffett’s cautious yet opportunistic investment ethos with the tangible financial fundamentals of each company, the piece argues that these stocks provide a rare blend of “quantum upside” and “margin of safety.”

For investors who are eager to get a foothold in a field that could redefine computing, IBM and Qualcomm appear to be the most realistic, Buffett‑compatible entry points—at least for the next decade as the quantum race inches closer to commercial viability.