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The quantum computing industry has been on fire in recent weeks, and much of the excitement has been fueled by Google’s (GOOGL) unveiling of Willow, a potentially revolutionary quantum chip. Google’s breakthrough has reignited interest in this state-of-the-art technology, showcasing its potential to transform industries ranging from healthcare to artificial intelligence and financial modeling. This sent shares of major players in the quantum computing landscape soaring to unprecedented highs.
Nevertheless, quantum stocks experienced a sharp selloff on Jan. 8 following comments from Nvidia (NVDA) CEO Jensen Huang, who stated that practically useful quantum computers are still 15-20 years away. His remarks were later echoed by Meta Platforms (META) CEO Mark Zuckerberg, who said that “it’s still quite a ways off from being a truly practical paradigm.” The downturn in quantum stocks was short-lived, as most started rebounding after Nvidia announced it would host a Quantum Day on March 20.
In this article, we’ll take a closer look at four quantum computing stocks: Rigetti Computing (RGTI), IonQ (IONQ), Quantum Computing (QUBT), and D-Wave Quantum (QBTS). With that, let’s dive in and see what makes these stocks worth watching as the quantum computing revolution gains momentum.
Quantum Computing Stock #1: Rigetti Computing
Rigetti Computing (RGTI), with a market cap of $3.7 billion, stands as a pioneer in full-stack quantum computing. The company has created quantum computers accessible via the cloud and serves government entities, research clients, and global enterprises. Also, RGTI has designed the first multi-chip quantum processor for scalable quantum computing systems. Notably, the company designs and produces its chips at Fab-1, the industry’s first integrated quantum device manufacturing facility. It also provides professional services, including algorithm development, benchmarking, quantum application programming, and software development, and boasts over 200 patents.
RGTI stock is up over 1,074% in the past 52 weeks but down 26% over the past month.
On Dec. 23, Rigetti announced the public release of its 84-qubit Ankaa-3 system. Ankaa-3 is Rigetti’s latest quantum computer, featuring a comprehensive hardware redesign that enhances performance. Rigetti also marked significant two-qubit gate fidelity milestones with Ankaa-3: successfully cutting error rates in half in 2024 to reach a median 99.0% iSWAP gate fidelity and achieving 99.5% median fidelity fSim gates. Ankaa-3 is accessible to the company’s partners through the Rigetti Quantum Cloud Services platform and will be available on Amazon Braket and Microsoft Azure in the first quarter of 2025.
In 2025, Rigetti Computing has numerous milestones that could serve as potential catalysts for its stock. The company intends to unveil a new modular system architecture, while continuing to increase fidelities, this year. By mid-2025, it aims to launch a 36-qubit architecture based on four 9-qubit chips tiled together, which is anticipated to achieve 99.5% median 2-qubit fidelity. Furthermore, by the end of 2025, the company anticipates releasing a system with over 100 qubits, aiming for a 2x reduction in error rates from the current level. Subsequently, RGTI intends to develop the 336-qubit Lyra system.
Let’s now take a look at the company’s financials. Its latest earnings report was released on Nov. 12. With that, the company’s third-quarter total revenues dropped 22.8% year-over-year to $2.4 million, missing Wall Street’s estimates by $1.01 million. The decline in revenue was attributed to lower QCaaS revenue, partially offset by higher revenue from development contracts and sales of QPUs. Total operating expenses remained largely unchanged year-over-year at $18.6 million. RGTI posted GAAP EPS of -$0.08, compared to -$0.17 in a year ago quarter, beating expectations by $0.01.
Meanwhile, the company ended the quarter with $92.57 million in cash and cash equivalents as well as available-for-sale investments, while its cash burn rate stood at $42.1 million for the nine months ending Sep 30, 2024. It also priced a $100 million registered direct offering of common stock in late November, so I don’t anticipate any liquidity issues or the need for further dilution this year.
Analysts tracking the company expect its GAAP net loss to narrow by 17.65% year-over-year to $0.28 per share for fiscal 2025, while the top line is projected to grow 41.51% year-over-year to $15.57 million.
Analysts are optimistic about Rigetti’s potential in the quantum market, as evidenced by a consensus “Strong Buy” rating. Out of the five analysts covering the stock, four recommend a “Strong Buy,” and one gives a “Moderate Buy” rating. Notably, RGTI trades at a premium to its mean price target of $6.10 and its Street-high price target of $12. With that, positive updates on the company’s technology roadmap will likely be necessary to prompt price target hikes from Wall Street analysts.
Quantum Computing Stock #2: IonQ
Valued at a market cap of $8.4 billion, IonQ (IONQ) is a leading player in the quantum computing industry, specializing in the development of general-purpose quantum computing systems. The company provides a cloud-agnostic end-to-end solution that supports every quantum language and SDK tool. IONQ also boasts strong partnerships with major technology firms such as Microsoft, Amazon, and Google, enabling businesses of all sizes to access IonQ’s quantum computers through popular cloud platforms like Azure, AWS, and Google Cloud.
IonQ employs trapped ion quantum computers in its technology strategy, which are known for their extended coherence times and error-correction capabilities. These features make IonQ’s quantum systems especially well-suited for tackling complex computational tasks in industries like biopharmaceuticals, engineering, and materials science. The company's current-generation quantum computers, IonQ Forte and IonQ Forte Enterprise, represent the latest in advanced systems, featuring 36 algorithmic qubits.
Shares of IONQ have surged 242% over the past 52 weeks but have dropped 17% over the past month.
IonQ recently acquired Qubitekk to develop a quantum networking infrastructure, solidifying its leadership position. IonQ has highlighted quantum networking as a strategic focus for scaling its quantum computers and enhancing the overall usefulness of quantum computing. This acquisition also increases the company’s customer base, opening up new opportunities for bookings and revenue, and broadens its quantum networking hardware and security patent portfolio.
Meanwhile, IONQ has an ambitious roadmap, with IONQ Tempo expected to be unveiled this year. IonQ Tempo is anticipated to deliver a commercial advantage for specific applications. Tempo is designed to have faster gate speeds, mid-circuit measurement, and 99.9% fidelity, all of which contribute to addressing larger and more complex problem classes and achieving a quicker time-to-solution. This means that it will possess actual commercial applications.
IonQ posted its most recent quarterly earnings report on Nov. 6. Its revenue surged 103.3% year-over-year to $12.4 million, primarily fueled by advancements in its arrangements to build specialized quantum computing hardware and new revenue contracts under which it provided services. The top line exceeded the high end of the company’s guidance range and surpassed Wall Street’s expectations by $1.82 million. At the same time, total operating costs increased by 36% year-over-year to $65.5 million, largely due to higher R&D expenses and headcount growth aimed at supporting the technology roadmap and commercial commitments. As a result, IonQ reported a GAAP EPS of -$0.24, compared to -$0.22 in the same quarter last year, missing expectations by $0.01. Regarding the balance sheet, the company held $365 million in cash and short-term investments as of Sep 30, 2024, and carried no debt, indicating a solid financial position that minimizes the risk of dilution or bankruptcy.
Looking ahead, the company boosted its FY24 revenue guidance to a range of $38.5 million to $42.5 million. This upward revision is bolstered by strong bookings, with IONQ achieving $63.5 million in new bookings for the quarter.
According to Wall Street estimates, IONQ’s GAAP net loss is expected to widen by 33.72% year-over-year to $1.15 per share in FY25. At the same time, analysts anticipate the company’s revenue to double year-over-year to $83.45 million.
Analysts have a consensus rating of “Moderate Buy” on IonQ stock. Among the five analysts offering recommendations for the stock, two rate it as a “Strong Buy,” one as a “Moderate Buy,” and two advise holding. The stock trades at a premium to its average price target of $30.40, with 21% upside potential to the Street-high target of $45.
Quantum Computing Stock #3: Quantum Computing
With a market capitalization of $1.3 billion, Quantum Computing (QUBT) offers a comprehensive suite of products that includes lithium niobate (TFLN) photonic chips and its flagship Dirac-3 “entropy-based” quantum computer. It also develops reservoir computing hardware that efficiently processes data at high speeds and provides remote sensing capabilities. Its offerings are designed to tackle complex optimization problems and strengthen cybersecurity through quantum processes.
QUBT sets itself apart with its innovative approach to entropy, claiming that its Dirac-3 design facilitates a more open framework that leverages entropy rather than fighting it. As a result, this lowers the cost and complexity of these cutting-edge devices. Moreover, the company’s focus on TFLN technology for chip production positions it as a potential frontrunner in creating scalable, energy-efficient quantum computing solutions.
QUBT shares have skyrocketed 1,017% over the past 52 weeks but have slumped 46% over the past month.
While QUBT has not yet generated significant revenue, the company has made notable progress toward commercialization. On Jan. 15, Quantum Computing announced a partnership with Sanders Tri-Institutional Therapeutics Discovery Institute, Inc. (Sanders TDI) to promote progress in computational biomedicine research. Through this collaboration, QCi will grant Sanders TDI access to its quantum computation technology and hardware, specifically the Dirac-3 Entropy Quantum Computing Machine, to assist the Institute’s experimental work.
On Jan. 7, Quantum Computing announced that it had received its third and fourth purchase orders for its TFLN photonic chip foundry. The orders, received from a prestigious European technical university and a Canadian photonic integrated circuit design house, represent a significant milestone in the QCi Foundry Pilot Launch Program.
On Dec. 17, Quantum Computing secured a contract with NASA to leverage Dirac-3 in addressing the space agency’s advanced imaging and data processing needs. This contract highlights the company’s dedication to advancing next-generation quantum and photonic technologies to tackle complex optimization and computational challenges. If successful, the outcome of this project could set the stage for similar applications in other fields where quantum solutions provide advantages in speed and quality.
Looking ahead, the company has a well-defined growth roadmap for the coming years, emphasizing a go-to-market approach that enhances QUBT’s potential to achieve sustained revenue growth. The company’s U.S.-based semiconductor foundry in Tempe, Arizona, is slated to begin full-scale production in Q1 2025, positioning QUBT for growth this year. This facility will focus on the production of high-performance photonic chips and expanding the capabilities and capacity of TFLN devices. With that, QCi anticipates generating high-margin revenue this year, leveraging its first-mover advantage and the exponential growth in market demand. On the quantum computing platform front, the company has generated early revenues from research grants in 2024 and expects a strong pipeline conversion of commercial and government opportunities into sales in 2025.
On Nov. 6, Quantum Computing released its third-quarter results. The company’s revenues were approximately $101,000, up 102% year-over-year. The revenue growth was primarily driven by progress in executing its contract with Johns Hopkins University to deliver a customized quantum LiDAR prototype. Its GAAP EPS stood at -$0.06, compared to -$0.10 for the same period of the previous year. Cash and cash equivalents at the end of the quarter stood at $3.1 million, with a cash burn rate of $12.4 million for the nine months ending Sep. 30, 2024. Notably, in Jan. 2025, QUBT secured a private placement of $100 million, bringing the total capital raised since Nov. 2024 to $190 million. This significantly bolsters QUBT’s financial position, which will greatly aid in advancing innovation and commercialization efforts.
A single analyst who tracks Quantum Computing expects the company to post a net loss of $0.21 per share for FY25, an improvement from a year ago. Also, QUBT revenue is projected to jump 200% year-over-year to $1.50 million.
The sole analyst covering QUBT stock rates it as a “Moderate Buy.” Similar to its peers, the stock trades above its mean price target of $8.50.
Quantum Computing Stock #4: D-Wave Quantum
D-Wave Quantum (QBTS) stands out as a premier provider of quantum computing systems, software, and services, and holds the distinction of being the first commercial supplier of quantum computers. QBTS’s technology is versatile, serving a broad spectrum of fields such as logistics, artificial intelligence, material sciences, drug discovery, and financial modeling. It caters to numerous blue-chip clients, such as Mastercard (MA), Deloitte, Siemens (SIEGY), and Lockheed Martin (LMT), among others. Its market cap currently stands at about $1.5 billion.
D-Wave Quantum’s flagship product, the Advantage quantum computer, boasts more than 5,000 qubits and is paired with Leap, a cloud-based service that provides real-time access to quantum computing resources. It also offers Ocean, a collection of open-source tools, and D-Wave Launch, a professional service that assists enterprises in navigating from problem identification to solution implementation. In addition, the company is strategically focusing on developing gate-model quantum computing systems to broaden its applicability across various use cases. With that, QBTS is a leader in providing commercially viable quantum solutions.
Over the past 52 weeks, QBTS stock has surged by 591%, although it has dropped 43% in the last month.
It is important to note that D-Wave has a strong customer base; as of the third quarter of 2024, the company reported having 132 total customers, including 76 commercial customers. To date, customers have submitted over 200 million problems to the company’s Advantage quantum systems. QBTS remains committed to aggressively expanding its customer base through various initiatives.
For example, D-Wave recently launched the new Leap Quantum LaunchPad program, aimed at accelerating the deployment of quantum computing applications. The program offers qualified participants a three-month free trial that includes access to Advantage annealing quantum computers, the Leap quantum cloud service, and technical guidance from the company’s quantum and optimization experts. Many participants will probably recognize the benefits of using quantum annealing computers to solve optimization problems during such an extended free trial, potentially leading to further expansion of its customer base. And on Jan. 15, D-Wave entered into a partnership with Carahsoft Technology Corp., a provider of IT solutions for the government, to distribute its quantum computing technologies to public sector organizations.
Meanwhile, D-Wave is making significant progress toward the commercial rollout of its sixth-generation annealing quantum computing system, Advantage2, which will utilize 4,400 qubits. The company successfully calibrated the Advantage2 processor in the third quarter. Notably, the Advantage2 processor surpasses the existing Advantage system in computational power.
D-Wave Quantum announced its financial results for the third quarter of 2024 on Nov. 14. Its revenue fell 27% year-over-year to $1.87 million, missing expectations by $0.71 million. The drop was mainly due to a decline in professional service revenue, which was partially offset by higher QCaaS revenue. QBTS posted GAAP EPS of -$0.11, missing the consensus by $0.01. Its adjusted EBITDA loss widened 19% year-over-year to $13.8 million in Q3 due primarily to lower revenue and higher operating expenses. Still, management stated that they anticipate the fiscal 2024 adjusted EBITDA loss to be lower than the fiscal 2023 adjusted EBITDA loss of $54.3 million.
In terms of liquidity, D-Wave Quantum recently announced that it had raised $150 million in gross proceeds through an “at-the-market” equity offering program. The company currently holds a cash balance of approximately $320 million.
It’s also worth mentioning the update shared by the company on Jan. 10. QBTS said its 2024 bookings are expected to surpass $23 million, reflecting an about 120% year-over-year increase, while Q4 bookings will be at least $18 million, representing remarkable 500% year-over-year growth. Moreover, it announced the first-ever customer purchase of a D-Wave Advantage annealing quantum computing system, marking a notable expansion to its revenue model.
Analysts tracking D-Wave project its GAAP net loss to narrow by 7.32% year-over-year to $0.38 per share for FY25, with revenue estimated to grow 69.14% from the previous year to $14.8 million.
Analysts have a “Strong Buy” consensus rating on QBTS stock. Out of the seven analysts covering the stock, six recommend “Strong Buy,” and one advises “Moderate Buy.” Not surprisingly, the stock trades slightly above its mean price target of $5.82 but has 47.8% upside potential to the Street-high price target of $9.00.
