This Is the AI and Quantum Computing Stock Billionaires Want to Own (and It's Not Nvidia)

AI and quantum computing represent very large addressable markets (PwC: >$15 trillion by 2030; BCG: $450–$850 billion by 2040), and Nvidia remains the dominant GPU supplier with ongoing product cadence (Vera Rubin GPU slated H2 2026) and NVQLink for hybrid AI-quantum workloads, but faces heavy billionaire profit-taking and a trailing 12‑month P/S above 30. By contrast, billionaire managers have been accumulating Alphabet — Berkshire bought 17,846,142 Class A shares and Coatue added 5,210,434 Class A and 2,091,564 Class C shares — supported by Google Cloud’s 47% Q4 sales growth and a >$70 billion annual run rate, plus $126.8 billion in cash and nearly $165 billion in net cash from operations in 2025, positioning Alphabet to bankroll AI and quantum investment.

Analysis

Market structure: AI + quantum accentuates a two-tier market — dominant infrastructure platforms (GOOGL, NVDA, select chip-equipment suppliers) capture pricing power while smaller GPU rivals and ad-dependent media risk margin pressure. Persistent GPU scarcity and Nvidia's annual product cadence support pricing for H100/Blackwell families through 2026, while Google leverages search/Cloud scale (>$70B ARR) to monetize generative AI at higher margins.

Risk assessment: Key tail risks are AI-valuation derating (a 30%+ drawdown if hype collapses), antitrust action on Google (material in 12–24 months), and supply-chain geopolitics affecting fabs (a Taiwan/China shock would spike semicap premiums). Short-term (days–weeks) drivers are earnings/guidance and product announcements; medium-term (6–18 months) drivers include contract wins and Vera Rubin/Willow milestones; long-term (2–5 years) is real revenue conversion from AI/quantum.

Trade implications: Favor durable-capitalization longs in GOOGL and selective semicap exposures (INTC modestly) while de-risking concentrated NVDA positions via trims or options because NVDA’s multiples imply heavy execution perfection. Use pair trades (long GOOGL vs short NVDA) over 6–12 months, and employ covered calls or bear-call spreads on NVDA to harvest elevated implied volatility.

Contrarian angles: Consensus underestimates structural risks to Nvidia’s multiple — superior hardware doesn’t guarantee proportionate revenue capture if software/customers shift; conversely, the market may under-appreciate Alphabet’s optionality from Cloud+Willow given $126B+ liquid balance and $165B operating cash last year. Historical parallel: 1999–2002 tech rotations show platform monopolies can extend but multiples revert once revenue conversion lags.

Key Decisions for Investors

• Establish a 2–3% portfolio long in GOOGL (buy shares) with 18–24 month horizon; add on any pullback ≥5% within 30 days; target +20–30% upside, place a hard stop at −15% from entry.
• If NVDA exposure >1% of portfolio, trim to 1–2% by selling into any 15% rally from current levels or when 30-day implied volatility falls below its 70th historical percentile; redeploy proceeds into GOOGL/INTC.
• Buy 12-month GOOGL LEAPS equal to 1–2% notional (ATM or 5% ITM) to capture Cloud/AI optionality; concurrently sell 30–60 day OTM covered calls on NVDA (or implement 30–60 day bear-call spreads) to monetize premium and reduce tail risk.
• Implement a pair trade: long GOOGL / short NVDA, equal-dollar, horizon 6–12 months; rebalance monthly and tighten short if NVDA underperforms by >25% or GOOGL outperforms by >20%.
• Reduce exposure to small/mid-cap ad-dependent names by ~25% over the next quarter and redeploy up to 2% into semicap/AI infrastructure names (e.g., INTC, select equipment suppliers) to capture secular capex increase.