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Quantum computing is still in its infancy but holds significant potential to transform industries, particularly when integrated with artificial intelligence (AI). Unlike traditional computers, which process data using bits that can be either zero or one, quantum computers use the principles of quantum mechanics to perform computations at much higher speeds. Instead of conventional bits, quantum computers use quantum bits (qubits), which can exist as zero, one, or both simultaneously. This unique capability allows them to evaluate multiple possibilities at once, making it much faster at solving certain complex problems.
The global quantum computing market is projected to expand from $1.1 billion in 2024 to $12.6 billion by 2032. Investors looking to gain early exposure to this emerging technology may want to monitor two high-growth stocks in the sector. Wall Street analysts remain bullish on their long-term potential, assigning both a “Strong Buy” rating. Let’s take a closer look at why these stocks stand out.
Quantum Computing Stock #1: D-Wave Quantum
Valued at $1.5 billion, D-Wave Quantum (QBTS) is one of the leading companies of the quantum computing revolution. It was the first to introduce a commercial quantum computer and focus on quantum annealing — a unique approach that sets it apart from universal gate-based quantum systems developed by industry giants like International Business Machines (IBM) and Google (GOOGL). D-Wave Quantum’s stock has been highly volatile, fluctuating between a 52-week low of $0.75 and a high of $11.41. Last year, the stock skyrocketed by an astonishing 921%, significantly outperforming the broader market’s 24% gain.
D-Wave’s flagship product, the Advantage Quantum Computer, boasts over 5,000 qubits, making it one of the most advanced quantum annealers available. The company has also developed Leap, a cloud-based quantum computing platform that allows businesses and researchers to access quantum resources remotely. Unlike some competitors still in the R&D stage, D-Wave has successfully commercialized its technology through multiple revenue streams, including quantum cloud services, professional services, hardware sales, and government contracts.
The company’s customer base continues to grow, reaching 132 customers by the third quarter of fiscal 2024. Total revenue for the quarter was $1.9 million, with Quantum Computing as a Service (QCaaS) revenue rising 41% and government contract revenue increasing 66%. Like many emerging tech firms, D-Wave remains unprofitable due to heavy investments in R&D, reporting a net loss of $0.11 per share, slightly improving from $0.12 in the prior-year quarter. Its cash balance stood at $29.3 million. D-Wave recently projected that fiscal 2024 bookings would surpass $23 million, marking a 120% increase from fiscal 2023. Analysts anticipate a slight revenue decline in fiscal 2024, followed by an 88.1% surge to $16.5 million in fiscal 2025. Losses are expected to shrink to $0.32 per share this year and $0.23 per share in 2025.
Among the seven analysts covering D-Wave’s stock, six rate it as a “Strong Buy,” while one gives it a “Moderate Buy.” The stock is trading near its average target price of $5.82, but with a high-end estimate of $9, it has the potential to rally up to 31% from current levels.
Quantum Computing Stock #2: Rigetti Computing
With a market capitalization of $3.4 billion, Rigetti is a dedicated quantum computing company that has attracted interest from both investors and businesses looking to benefit from the next era of computing advancements. The company focuses on superconducting qubit technology. Similar to D-Wave, Rigetti’s stock has seen considerable volatility, fluctuating between a 52-week low of $0.66 and a high of $21.42. The stock surged an impressive 1,007% over the past 52 weeks, significantly outperforming the broader market.
Rigetti’s Quantum Cloud Services (QCS) provides users with cloud-based access to quantum computing, facilitating research and commercial applications in fields such as optimization, AI, and complex simulations. In the third quarter, the company reported total revenue of $2.4 million, down from $3.1 million in the same period last year and missing consensus estimates by $1.01 million. Net loss per share improved to $0.08 from $0.17 a year ago. The company ended the quarter with $92.6 million in cash and cash equivalents on the balance sheet. Rigetti’s financial future depends on increased adoption of quantum solutions and securing consistent funding.
In December 2024, Rigetti publicly launched its latest quantum system, the 84-qubit Ankaa-3, a major advancement aimed at improving quantum performance. The system is now accessible through Rigetti Quantum Cloud Services and is set to become available on Amazon (AMZN) Braket and Microsoft (MSFT) Azure in early 2025.
Looking ahead, Rigetti has outlined key technological milestones for 2025 that could drive revenue growth. It plans to introduce a 36-qubit system using four interconnected 9-qubit chips, targeting a 99.5% median two-qubit fidelity. CEO Dr. Subodh Kulkarni has described this as “the most ambitious multi-chip QPU architecture in the market.” Analysts predict Rigetti’s revenue will decline by 8.3% in 2024 before rebounding with a 41.5% increase in 2025. Losses are expected to narrow to $0.29 per share in 2024 and further decrease to $0.20 per share in 2025.
Among the five analysts covering RGTI stock, four rate it a “Strong Buy,” while one gives it a “Moderate Buy.” Following its remarkable rally, the stock has already surpassed its average price target of $6.10 and the highest estimate of $12. Further positive developments could lead analysts to raise their price targets.
The Key Takeaway
Quantum computing has the potential to transform industries such as medicine, cybersecurity, finance, and AI by tackling problems at a speed that traditional computers cannot. However, since the quantum computing sector is still in its early stages, these stocks may experience significant volatility. Investors with a high risk tolerance and a long-term investment horizon might consider starting with a small position. Meanwhile, more cautious investors may prefer to monitor the companies’ financial performance before making any investment decisions.
