Artificial intelligence (AI) was a hot sector in 2025, and it looks to remain so in 2026. AI technology could get a further boost in the new year with the rise of quantum computing, which promises more potent computational capabilities than today's supercomputers.
Quantum computer company D-Wave Quantum (QBTS +7.50%) is bringing this tech to the AI arena. Others in the AI space, such as Google parent Alphabet (GOOGL 0.54%)(GOOG 0.47%), are betting big on artificial intelligence to boost their business.
Between the up-and-coming D-Wave and tech titan Alphabet, does one stand out as the superior AI investment? The short answer is yes. Read on to learn which and why.
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D-Wave Quantum's AI edge
By employing the unique properties of quantum mechanics, quantum computers can perform calculations that are difficult or impossible for conventional computers. D-Wave Quantum is among the many pure-play quantum companies pursuing this nascent tech, but what separates D-Wave from competitors is its focus on annealing quantum machines.
An annealing quantum device is specifically designed for optimization tasks. This means the company's tech can help businesses optimize the training and development of AI and machine learning (ML) models.
According to D-Wave CEO Alan Baratz, "We're seeing early evidence that annealing quantum computing could play a key role in helping AI/ML with more efficient model training, reduced energy consumption, and faster time-to-solution."
So far, these benefits haven't translated into much revenue. In the company's third quarter, sales totaled $3.7 million.
While this income represented a 100% year-over-year increase, it was not enough to cover operating expenses of $30.4 million, resulting in an operating loss of $27.7 million in Q3. This is an increase over the prior year's loss from operations of $20.6 million.
However, D-Wave exited Q3 with the highest cash balance in its history at more than $836 million. This sum will sustain its operations for a time while it builds up sales.
NYSE: QBTS
Key Data Points
Alphabet's AI success
For Alphabet, succeeding in the AI arena is a must. Consequently, it poured funds into ever-rising capital expenditures as it built out its AI infrastructure. The company's capex was nearly $24 billion in Q3 alone, a whopping 83% year-over-year increase.
The expense has proven worthwhile, however. Over the two years since Alphabet released its Gemini AI model, use of the Gemini app has grown to over 650 million monthly users, while 70% of its Google Cloud customers adopted the company's AI.
In November, the tech titan released Gemini 3, its most advanced AI yet, capable of nuance and picking up subtle clues. Alphabet CEO Sundar Pichai described the significance by stating, "It's amazing to think that in just two years, AI has evolved from simply reading text and images to reading the room."
When OpenAI kicked off the current AI frenzy with the launch of ChatGPT, some predicted the end of Google's search business. Instead, Google has only gotten stronger, with Pichai noting, "As people learn what they can do with our new AI experiences, they are increasingly coming back to search more."
This led to Google search revenue rising to $56.6 billion in Q3, up from $49.4 billion in 2024. Overall, the company saw strong Q3 sales growth of 16% year over year to $102.3 billion, and operating income increased 9% year over year to $31.2 billion.
NASDAQ: GOOGL
Key Data Points
Choosing between D-Wave Quantum and Alphabet
Since quantum computing tech is still in its early stages, D-Wave could build up a position as a specialist in solving optimization problems, such as identifying the best vehicle routes for the logistics industry. This assumes the company can survive long enough to get there, and given its rising operating costs against slim sales, the risk is that its business could collapse before it achieves financial success.
Although Alphabet is going strong, it has a cloud hanging over it as well. Part of the company's advertising business was deemed an illegal monopoly by the federal government, which won its court battle against the tech giant. The repercussions of the court ruling won't be known until 2026.
Alphabet intends to appeal the ruling, but investors should be aware that the court case applies to its Google ad network. This part of Alphabet's business is in decline, with Q3 revenue of $7.4 billion, down from 2024's $7.5 billion. Google's ad network isn't as essential to the company's long-term growth as search and AI, but depending on the court's penalties, a revenue hit could happen.
Even so, Alphabet's Google search and cloud computing businesses are benefiting from the rise of AI. Alphabet is a profitable business with growing revenue and operating income. These factors make Alphabet the better AI stock over D-Wave to invest in for the long haul.
