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Quantum Selloff: Should Investors Consider These 3 Hyperscalers?
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Key Takeaways
Alphabet pairs 82% Google Cloud growth with quantum research targeting commercial systems by decade-end.
Amazon's AWS sales rose 37%, while AWS and QuEra plan to bring a fault-tolerant system to Braket in 2028.
Microsoft combines 39% Azure growth with a new Maryland center for testing its Majorana 2 quantum system.
The quantum-computing trade is facing a valuation reset as investors demand clearer evidence of commercialization. Over the past few months, pure-play quantum computing stocks have come under pressure despite technological milestones, partnerships and government backing. The market is essentially skeptical about one key issue: quantum progress is accelerating, but the revenue and earnings needed to justify lofty valuations remain further out.
Yet the broader quantum space has been performing much better than the pure plays. The Defiance Quantum ETF (QTUM - Free Report) , which holds a diversified basket spanning quantum, AI, semiconductors and technology infrastructure, delivered more than 40% growth over the past six months.
This gives investors a reason to reassess how they want to participate in the quantum opportunity. Pure plays offer more direct exposure, but their investment cases remain closely tied to future quantum adoption. By contrast, hyperscalers are already generating substantial revenue from cloud and AI while investing in quantum research and infrastructure.
Here, we have selected three hyperscaler stocks, Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) , that combine established revenue streams with expanding quantum-computing initiatives.
Quantum Opportunity Still There
Rather than relying solely on companies whose valuations depend heavily on future quantum commercialization, investors can examine hyperscalers that are already monetizing cloud and AI infrastructure while building quantum capabilities. That combination provides a different way to participate in quantum's longer-term development without making quantum revenue the immediate earnings driver.
Why Hyperscalers Remain in Focus
The 2026 selloff in pure-play quantum stocks reflects a growing focus on when companies can generate meaningful cash flows, not whether quantum technology is advancing. IonQ, Rigetti and D-Wave continue to report technology and commercial milestones, but their investment cases remain tied closely to future quantum adoption. Higher federal reserve rates add to the pressure.
Meanwhile, the solid ETF performance shows that investors are not necessarily abandoning quantum exposure but are becoming more selective about companies that can benefit from the theme while generating revenue from established businesses.
That backdrop puts hyperscalers in focus. Their AI and cloud operations provide current revenue streams that can support longer-duration quantum investments, reducing reliance on near-term quantum monetization. Meanwhile, government funding continues to target the industry's technical bottlenecks. The Commerce Department finalized up to $100 million each for Rigetti and D-Wave on Sept. 8, while a separate award of up to $1 billion to IBM's newly formed Anderon subsidiary is aimed at establishing a quantum semiconductor foundry.
3 Hyperscalers to Consider
Alphabet: The company combines strong cloud growth with an expanding quantum program. Alphabet's second-quarter 2026 revenue increased 24% year over year, while Google Cloud revenue surged 82%. Google Quantum AI is pursuing both superconducting and neutral-atom approaches and said in March that it expects commercially relevant superconducting quantum computers by the end of the decade. In July, Google researchers also reported progress in using reinforcement learning to improve quantum error correction.
GOOGL carries a Zacks Rank #3 (Hold). The stock is expected to report earnings growth of 89.7% in 2026 over revenue growth of 26.4%.
Amazon: Amazon offers quantum exposure through AWS alongside strong AI infrastructure growth. AWS sales jumped 37% year over year in the second quarter, its fastest growth in 18 quarters, while AWS operating income rose to $16.6 billion. AWS also reached a $169 billion annualized revenue run rate, while its AI business and Amazon's chips business each surpassed $25 billion in annualized revenues. Separately, AWS and QuEra plan to bring the Libra fault-tolerant quantum system to Amazon Braket in 2028.
AMZN carries a Zacks Rank #3. The stock is expected to report 2026 earnings growth of 81.5% on revenue growth of 15.7%.
Microsoft: The company combines strong Azure growth with a differentiated topological-qubit approach. Azure and other cloud services revenue grew 39% in fiscal second-quarter 2026. More recently, on Sept. 22, Microsoft opened a 15,000-square-foot quantum research center in Maryland, giving DARPA direct on-site access to its Majorana 2 quantum system for independent testing and evaluation.
View the Zacks #1 Rank List
Image: Bigstock
Quantum Selloff: Should Investors Consider These 3 Hyperscalers?
Key Takeaways
The quantum-computing trade is facing a valuation reset as investors demand clearer evidence of commercialization. Over the past few months, pure-play quantum computing stocks have come under pressure despite technological milestones, partnerships and government backing. The market is essentially skeptical about one key issue: quantum progress is accelerating, but the revenue and earnings needed to justify lofty valuations remain further out.
Yet the broader quantum space has been performing much better than the pure plays. The Defiance Quantum ETF (QTUM - Free Report) , which holds a diversified basket spanning quantum, AI, semiconductors and technology infrastructure, delivered more than 40% growth over the past six months.
This gives investors a reason to reassess how they want to participate in the quantum opportunity. Pure plays offer more direct exposure, but their investment cases remain closely tied to future quantum adoption. By contrast, hyperscalers are already generating substantial revenue from cloud and AI while investing in quantum research and infrastructure.
Here, we have selected three hyperscaler stocks, Alphabet (GOOGL - Free Report) , Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) , that combine established revenue streams with expanding quantum-computing initiatives.
Quantum Opportunity Still There
Rather than relying solely on companies whose valuations depend heavily on future quantum commercialization, investors can examine hyperscalers that are already monetizing cloud and AI infrastructure while building quantum capabilities. That combination provides a different way to participate in quantum's longer-term development without making quantum revenue the immediate earnings driver.
Why Hyperscalers Remain in Focus
The 2026 selloff in pure-play quantum stocks reflects a growing focus on when companies can generate meaningful cash flows, not whether quantum technology is advancing. IonQ, Rigetti and D-Wave continue to report technology and commercial milestones, but their investment cases remain tied closely to future quantum adoption. Higher federal reserve rates add to the pressure.
Meanwhile, the solid ETF performance shows that investors are not necessarily abandoning quantum exposure but are becoming more selective about companies that can benefit from the theme while generating revenue from established businesses.
That backdrop puts hyperscalers in focus. Their AI and cloud operations provide current revenue streams that can support longer-duration quantum investments, reducing reliance on near-term quantum monetization. Meanwhile, government funding continues to target the industry's technical bottlenecks. The Commerce Department finalized up to $100 million each for Rigetti and D-Wave on Sept. 8, while a separate award of up to $1 billion to IBM's newly formed Anderon subsidiary is aimed at establishing a quantum semiconductor foundry.
3 Hyperscalers to Consider
Alphabet: The company combines strong cloud growth with an expanding quantum program. Alphabet's second-quarter 2026 revenue increased 24% year over year, while Google Cloud revenue surged 82%. Google Quantum AI is pursuing both superconducting and neutral-atom approaches and said in March that it expects commercially relevant superconducting quantum computers by the end of the decade. In July, Google researchers also reported progress in using reinforcement learning to improve quantum error correction.
GOOGL carries a Zacks Rank #3 (Hold). The stock is expected to report earnings growth of 89.7% in 2026 over revenue growth of 26.4%.
Amazon: Amazon offers quantum exposure through AWS alongside strong AI infrastructure growth. AWS sales jumped 37% year over year in the second quarter, its fastest growth in 18 quarters, while AWS operating income rose to $16.6 billion. AWS also reached a $169 billion annualized revenue run rate, while its AI business and Amazon's chips business each surpassed $25 billion in annualized revenues. Separately, AWS and QuEra plan to bring the Libra fault-tolerant quantum system to Amazon Braket in 2028.
AMZN carries a Zacks Rank #3. The stock is expected to report 2026 earnings growth of 81.5% on revenue growth of 15.7%.
Microsoft: The company combines strong Azure growth with a differentiated topological-qubit approach. Azure and other cloud services revenue grew 39% in fiscal second-quarter 2026. More recently, on Sept. 22, Microsoft opened a 15,000-square-foot quantum research center in Maryland, giving DARPA direct on-site access to its Majorana 2 quantum system for independent testing and evaluation.
MSFT carries a Zacks Rank #3. The stock is expected to report fiscal 2027 earnings growth of 9.3% on revenue growth of 17.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.