The Smartest Way to Play Quantum Computing May Already Be in Your Portfolio
While investors chase quantum moonshots like Rigetti Computing -- up over 1,100% over the prior 12 months -- and IonQ -- up nearly 500% over the same period -- Amazon (NASDAQ: AMZN) is quietly building the infrastructure to profit no matter who wins the quantum computing race.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »
RGTI Total Return Level data by YCharts.
The e-commerce giant's Amazon Web Services (AWS) Braket platform already hosts quantum computing services from multiple providers, making it the Switzerland of the quantum wars. But Amazon isn't just playing host; it's also developing its quantum hardware, creating two distinct paths to profit from what could become a trillion-dollar market. This dual approach makes Amazon the most overlooked opportunity in the market for quantum computing.
AI is accelerating quantum timelines
Conventional wisdom says practical quantum computing remains decades away. Most experts point to persistent challenges with error rates, qubit stability, and the need for near-absolute-zero operating temperatures. They're probably wrong.
What skeptics often overlook is the recursive learning potential of artificial intelligence (AI). When AI systems can design better AI systems, progress compounds exponentially. DeepMind's AlphaFold solved protein folding -- a 50-year challenge -- in months. The same recursive improvement cycle is about to hit quantum computing.
IBM plans to deliver its fault-tolerant quantum computer, Starling, by 2029 -- years ahead of previous predictions. The company says its breakthrough error-correction techniques will enable a system 20,000 times more powerful than today's quantum computers. This accelerated timeline reflects how AI is helping solve quantum's biggest challenges faster than expected.
AWS Braket: The quantum cloud marketplace
While pure-play quantum companies race to build better hardware, Amazon has taken a different approach. AWS Braket, launched in 2019, enables developers to access quantum computers from D-Wave, IonQ, Rigetti Computing, and others through the cloud. Think of it as the App Store for quantum computing -- Amazon profits regardless of which hardware ultimately wins.
This isn't Amazon's first platform rodeo. AWS generated $107.6 billion in revenue in 2024, crossing the $100 billion mark for the first time. Braket follows the same playbook, charging for access time while avoiding the massive research and development (R&D) costs of developing quantum hardware alone.
Amazon's in-house hardware gives it a dual advantage
Amazon isn't content to be just a middleman. The company's Center for Quantum Computing at Caltech is developing its own quantum processors, giving it a hedge in case proprietary hardware becomes the key differentiator. It's the best of both worlds: platform fees today, breakthrough potential tomorrow.
Yes, quantum stocks have exploded. Companies like Rigetti Computing and IonQ sport billion-dollar valuations despite minimal revenue. Quantum Computing has surged by over 3,000% in the past year. But Amazon offers something these pure plays can't: a profitable business generating nearly $700 billion in annual revenue.
The numbers tell the story. Over $1.25 billion poured into quantum start-ups in Q1 2025 alone -- double the amount from the previous year. Moreover, Nvidia CEO Jensen Huang reversed course, calling quantum computing "imminent" rather than decades away. This admission added significant fuel to the quantum rally earlier this year.
Real customers, real revenue, no hype required
Unlike pure-play quantum companies burning cash on R&D, Amazon's Braket already serves paying customers. Volkswagen uses it for traffic optimization research. Goldman Sachs explores quantum Monte Carlo simulations for derivatives pricing. Roche investigates drug discovery applications.
These aren't science projects. Fortune 500 companies are spending real money to explore quantum's potential. As algorithms improve and hardware matures, experimental budgets will transform into production workloads -- all running on AWS.
The beauty of Amazon's model is its optionality. If quantum computing takes another decade to mature, AWS will keep printing money from traditional cloud services. If breakthroughs accelerate, Amazon will capture the infrastructure spending boom. Heads you win, tails you don't lose.
The valuation case
At just 24 times 2027 projected earnings, the market isn't pricing in quantum's massive potential upside for this tech stock. If quantum becomes a $100 billion market by 2035 and AWS captures even 30%, that's $30 billion in high-margin revenue -- comparable to AWS's entire business five years ago. With AWS operating margins above 35%, quantum could add meaningful earnings power. Yet, this optionality is barely reflected in the stock's current valuation.
Investors looking for quantum upside without the moonshot risk don't need to chase cash-flow-negative companies. Amazon offers something far more powerful -- a platform that profits from the entire ecosystem, combined with a mountain of revenue. In the next wave of disruption, the real winner may not be the one building the quantum computer, but the one powering them all.
Should you invest $1,000 in Amazon right now?
Before you buy stock in Amazon, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $664,089!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $881,731!*
Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of June 9, 2025
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. George Budwell has positions in D-Wave Quantum, IonQ, Nvidia, and Rigetti Computing. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, International Business Machines, and Nvidia. The Motley Fool recommends Roche Holding AG and Volkswagen Ag. The Motley Fool has a disclosure policy.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Globe and Mail
37 minutes ago
- Globe and Mail
3 Dividend Aristocrats Ready for an (Upward) Technical Breakout
Technical analysis has always been a hit or miss for many investors. The guidelines and metrics can be as clear as day, but one must remember that the readings have to be taken with a grain of salt. Not only that, there's always the possibility of human error during analysis. Misinterpreting data and patterns or relying too heavily on specific indicators when a broader perspective would have been more ideal could result in an opposite desired outcome. Mix that with the various emotions that come from seeing the market go up and down on uncertain trade policies, and you have a recipe for disaster. Thankfully, Barchart has an objective way of compiling trade analysis and multiple data points into a simple yet elegant presentation called Trend Seeker ®. So today, let's use Trend Seeker ® in conjunction with one of my favorite income stock subsets - the Dividend Aristocrats - to evaluate which stocks have the strongest technical setups to act as a springboard for your long-term trading. How I Came Up With The Following Stocks Using Barchart's Stock Screener, I selected the following filters to get my list: Trend Seeker® Direction: Set at Strongest. Limits the results to stocks with a very strong bullish trend based on Trend Seeker®, which uses Barchart's computerized trend analysis system based on wave theory, market momentum, and volatility to identify potential buy and sell areas. Trend Seeker® Signal: Buy ratings based on Trend Seeker®'s analysis. Number of Analysts: 16 analysts. Indicator of a very high buy confidence in a stock. Current Analyst rating: Moderate to Strong Buy. Watchlist: Dividend Aristocats. This list limits the results to S&P 500 companies that have increased their dividends for 25 consecutive years or more. Having these filters set, I ran the screen and got 6 hits: I arranged the stocks in order from highest to lowest analyst ratings and selected the top three. However, Barchart Trend Seeker ® works in conjunction with Barchart Opinion to generate a complete analysis of stocks, and a buy signal from Trend Seeker ® may not necessarily mean a buy signal from Barchart Opinion or overall. For that reason, I'll remove XOM, CVX, and ALB from the list, as their opinion ratings are 'sell' - at least at the time I wrote this. With that out of the way, let's discuss the only three top Dividend Aristocrats on the on the list, starting with number one: Abbott Laboratories (ABT) Abbott is one of the most diversified healthcare companies in the world - and a frequent name featured in my top dividend stock lists. The company develops and markets medical devices, diagnostics, nutritional products, and branded generic medicines, and it is so well-known that there's a good chance that you or close family members are using its products. Abbott pays an annual $2.36 dividend, which translates to a yield of around 1.73% based on its current trading price. Trend Seeker ® Data ABT stock has a 100% overall buy rating based on Barchart Opinion and Trend Seeker, which, unsurprisingly, is based on a 100% buy rating across short, medium, and long-term indicators. It has maintained that rating from last month. However, its short-term averages are weakening as it approaches its first resistance point at $137.07, so it might be prudent to wait and see if it crosses above that or drops to its nearest support level before deciding on the stock. Caterpillar Inc (CAT) When you see heavy equipment on construction sites, you know there's going to be a Caterpillar product or machine right there. The company is a global manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and locomotives. It operates across many industries, including infrastructure, energy, and transportation. It also offers financing options under Cat Financial to help clients acquire their products more easily. The company pays a $5.64 annual dividend, which translates to around a 1.56% yield. Trend Seeker ® Data CAT has been leaning towards the sell side in recent times, although current price action - particularly when it broke through its short-term resistance-turned-support level at around $358.55 - has pushed its overall rating to a weak buy. Result? This can be a great buying opportunity for those who want to ride its growth up. International Business Machines (IBM) IBM was like Google or Microsoft back in the day, being one of the first companies to heavily and successfully focus on technology. Back then, offices were filled with the company's computers and devices. Although it lost a lot of traction in the 90s, the company is now making a grand comeback as a relevant player in the AI-heavy and quantum tech space. Dividend-wise, the company pays $6.72 annually, which translates to approximately a 2.39% yield — the highest on this list. Trend Seeker ® Data The company has had a strong run, with IBM stock up 27.84% year-to-date and 66.29% in the last twelve months, with the stock reaching a new all-time high of $283.06 on Thursday, June 12, 2025. It also maintains high current strength and direction scores. This tells me that IBM stock has the momentum to move higher, though a bit of profit-taking may be around the corner. I'd be cautious during the next few trading sessions, especially if the stock reaches around $285 and $290, as they're the closest psychological resistance levels for the stock. Final Thoughts These three Dividend Aristocrats are primed for a bullish trend, and they could be a great addition to your portfolio with the significant yield it can bring. If you are a long-term investor looking to maximize gains, these stocks are worth considering. However, these are based on current signals and analysis - which can change at the drop of a dime. That's why it's crucial to monitor the markets as and when you trade.
Globe and Mail
2 hours ago
- Globe and Mail
Better Cybersecurity Stock: CrowdStrike or SentinelOne?
Artificial intelligence (AI) may have many benefits, but it's also making it easier for hackers, online criminals, and other digital malefactors to threaten businesses, and those threats are getting more potent. Keeping them at bay requires a lot of funds to be devoted to cybersecurity, making companies like CrowdStrike (NASDAQ: CRWD) and SentinelOne (NYSE: S) excellent investment opportunities. But is there an advantage to buying one over the other now? How do these two approach cybersecurity? Both companies' base products are AI-powered protection platforms that analyze digital activity and learn to spot the threats among the normal activity. They deploy their software to network endpoints -- in other words, laptops, smartphones, and other devices that can access a client's internal network. By protecting these devices, companies make it harder for cyberattackers to gain access to their internal networks, where they might steal sensitive information, delete files, interfere with systems, or even lock them down with ransomware to extort payments from their victims. While endpoint protection is how both companies land clients, each bolsters its offerings with an array of other cybersecurity products that clients can use to create a protection suite tailored to their unique situations. Since these two direct competitors offer highly similar product types, it's hard to declare either a winner on this front from an investor perspective. Winner: Tie. CrowdStrike is much larger than SentinelOne From a sheer size perspective, CrowdStrike is the clear winner. During its fiscal 2026 first quarter, which ended April 30, CrowdStrike's annual recurring revenue (ARR) rose to $4.4 billion. SentinelOne's ARR of $948 million in its fiscal Q1 was less than a quarter of that. While size doesn't always matter, in this case, it does. Because so many more companies use CrowdStrike's platform, it's more likely that any given IT professional will have at least one contact already on its client list. If CrowdStrike is doing a great job with those clients, word will spread, and it will likely receive more serious consideration in future cybersecurity bidding processes. This advantage cannot be understated. Indeed, it's one of the reasons why CrowdStrike's growth has remained strong despite its size. Winner: CrowdStrike SentinelOne is growing more quickly than CrowdStrike, but just barely In terms of growth rates, SentinelOne is slightly outperforming CrowdStrike in this category. However, this should be no surprise because SentinelOne is a much smaller company. In fiscal Q1, SentinelOne's ARR rose 24% year over year, while CrowdStrike's increased 22% year over year. While I will give the point to SentinelOne, it's important to understand that CrowdStrike is growing from a much larger base than SentinelOne, making this close call all the more impressive for CrowdStrike. Winner: SentinelOne Neither company is massively profitable Due to its smaller size and focus on top-line growth, SentinelOne is far from profitable, while CrowdStrike has achieved intermittent profitability (although it reverted to a negative operating margin and a loss in its most recent quarter). S Operating Margin (Quarterly) data by YCharts. SentinelOne is far from breaking even, but CrowdStrike was in this same position about five years ago. There's no reason not to expect SentinelOne to follow a similar path to profitability, but it will take some time. Meanwhile, CrowdStrike should eventually turn a profit again, as it has proven that it can do that. Winner: CrowdStrike SentinelOne looks like a bargain CrowdStrike is leading this battle of the stocks so far, but SentinelOne is about to change the narrative with one jaw-dropping metric. CrowdStrike is the most popular cybersecurity stock in the market, and as a result, it has been bid up to expensive levels. From a price-to-sales (P/S) standpoint (the best metric to use to compare these companies since CrowdStrike flips between profitable and unprofitable, while SentinelOne is years away from profits), CrowdStrike has gotten far more expensive than SentinelOne over the past few years. S PS Ratio data by YCharts. CrowdStrike stock is now five times more expensive than SentinelOne, which is hard to believe, considering they compete in the same industry and are growing at nearly identical rates. This leads me to believe that CrowdStrike's stock has been overly hyped up while SentinelOne has been forgotten. While I'm OK with valuing CrowdStrike at a premium due to its market leadership position, this is far too great a premium to pay. SentinelOne is a dirt-cheap stock, and CrowdStrike is almost too expensive to consider. While I have been a long-term CrowdStrike bull, I'd be a bit cautious about buying the stock at its current lofty valuation. As a result, I think SentinelOne is the better cybersecurity investment right now. Should you invest $1,000 in CrowdStrike right now? Before you buy stock in CrowdStrike, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and CrowdStrike wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Now, it's worth noting Stock Advisor 's total average return is994% — a market-crushing outperformance compared to172%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Globe and Mail
2 hours ago
- Globe and Mail
Is Cathie Wood Actually Right About Tesla Stock?
Cathie Wood's Ark Invest has been one of the most vocal supporters of and investors in Tesla (NASDAQ: TSLA), and it's no secret in the investing world that Ark has a $2,600 price target on the stock for 2029. Still, what does that target mean, and does Ark's reasoning make sense? Here's the lowdown. Ark Invest's $2,600 price target The investment company's price target won't be "right," but then again, it's not supposed to be. It's an expected case scenario produced by a Monte Carlo simulation. In other words, Ark plugged numerous variables into an algorithm and ran a vast number of computer simulations to model a range of randomized outcomes. It's not necessary to get into the weeds about how these simulations are done; suffice it to say that on the bearish side, Ark's model shows a 25% chance that Tesla's stock price will be $2,000 or less in 2029, and on the bullish side, it finds a 25% chance that it will be $3,100 or more. Roughly in the middle lies Ark's expected value of $2,600 for the shares. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue » The modeling itself is almost certainly wrong, simply because it relies on variables that are incredibly hard to predict. To illustrate just how challenging it can be to make accurate stock forecasts using this kind of simulation, let's revisit the predictions Ark made in 2021 and 2023 for Tesla's share prices in 2025 and 2026, respectively. Tesla's current stock price in 2025 is about $320. Data source: Ark Invest presentations. Tesla's stock price is currently far below even the bearish scenario Ark simulated in 2021, and it would have to increase by 806% to hit the bear case scenario for 2026 that was projected in 2022. All of which is not to criticize Ark, because modeling the long-term value of a speculative growth stock like Tesla is incredibly difficult. The point is not to take the targets too literally. But if investors can't take such price targets as gospel, is there anything to be gleaned from Ark's analysis? As a matter of fact, there is. Where Ark's model makes sense The key points from the model that investors can take away are the following: Tesla's share price is highly sensitive to the timing and scaling of its robotaxi and Full Self-Driving (FSD) capabilities. The $2,600 price target for 2029 assumes that at that point, 88% of Tesla's enterprise value (market cap plus net debt) will be attributable to its robotaxi business, and just 9% to its electric vehicle (EV) sales. The message is clear: Don't buy Tesla stock unless you believe there's a good chance its robotaxi service (which may already be operating in its first market by the time you read this) won't be successful. Everything is riding on the company's robotaxi bet. Tesla's robotaxis Tesla's unsupervised Full Self-Driving (FSD) system is unproven, as is its robotaxi concept. Notably, it has yet to begin volume production of its dedicated robotaxi, the Cybercab. Moreover, there are myriad regulatory hurdles and safety concerns to overcome. Simply put, Tesla's robotaxi business is risky. And if it fails, it will likely set Tesla back significantly. Buyer beware. That said, while Tesla is a speculative growth stock -- remember, buyers at this point are investing primarily for its robotaxi business, not its electric vehicle business -- it's a growth stock with a difference. Tesla continues to dominate the EV market, and rivals such as Ford Motor Company and General Motors, have withdrawn from the robotaxi race. The auto industry as a whole has invested billions into the various efforts to develop a fully autonomous vehicle, and Tesla has not been alone in overpromising and underdelivering on it. Yet Tesla is launching its robotaxi service, and it has the vehicles, the data hoard, and the cash reserves to make it work. It's also ideally placed to start producing lower-cost EVs (which can be used as robotaxis controlled by unsupervised FSD systems), and the company says it's set to begin volume production of the Cybercab in 2026. Where Wood might be right Ark Invest is correct that the robotaxi business will be the key to Tesla's longer-term valuation and also the future of the auto industry. If -- and it's a big if -- Tesla can get the technology right, then there's significant upside for the stock, because all the other operational ingredients are in place for the company to make it work. That's where Wood and Ark might be right after all. Don't miss this second chance at a potentially lucrative opportunity Ever feel like you missed the boat in buying the most successful stocks? Then you'll want to hear this. On rare occasions, our expert team of analysts issues a 'Double Down' stock recommendation for companies that they think are about to pop. If you're worried you've already missed your chance to invest, now is the best time to buy before it's too late. And the numbers speak for themselves: Nvidia: if you invested $1,000 when we doubled down in 2009, you'd have $373,066!* Apple: if you invested $1,000 when we doubled down in 2008, you'd have $38,158!* Netflix: if you invested $1,000 when we doubled down in 2004, you'd have $664,089!* Right now, we're issuing 'Double Down' alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon. See the 3 stocks » *Stock Advisor returns as of June 9, 2025
