Quantum Computing Stocks Comparison: IonQ versus Rigetti Computing
In the rapidly evolving world of quantum computing, two companies stand out as leading contenders: IonQ and Rigetti Computing. A comparison analysis indicates that IonQ currently presents a stronger investment case, thanks to its financial performance, technology approach, and market potential, though both have distinct strengths and risks.
Financial Performance
IonQ has demonstrated stronger sales, notably with impressive 2024 revenue success and positive growth projections for 2025. Its stock price has surged over 400% through July 23, and the company expects to hit revenue of $75 million to $95 million in 2025. Despite this growth, IonQ's valuation is more favorable compared to Rigetti, making its stock comparatively attractive.
Rigetti's stock price, however, has climbed more than 1,000% in the same period. While this surge signals high investor speculation, the company remains unprofitable, exiting the first quarter with an operating loss of $21.6 million on sales of $1.5 million. Both companies have amassed significant cash reserves to fund ongoing R&D and operations.
Technology
IonQ utilizes trapped-ion qubits, which historically have slower gate speeds but gained a recent breakthrough with nanosecond-pulse gates, potentially narrowing the speed gap with superconducting qubits. IonQ’s qubits operate at room temperature and have advantages in scalability and lower error rates, which could translate to better long-term performance.
Rigetti focuses on superconducting qubits that operate at cryogenic temperatures and boasts extremely fast gate speeds (tens of nanoseconds), with the highest reported gate fidelity (~99.5%), indicating low error rates and high precision in quantum operations. Rigetti’s modular chiplet architecture leverages semiconductor industry techniques for scalability.
There is no consensus yet on which qubit technology will dominate; IonQ’s trapped-ion method is seen as stable and scalable, while Rigetti’s superconducting approach leads in speed and recent fidelity breakthroughs.
Market Potential
IonQ is described as more deliberate with its sizable $1.6 billion cash reserve, able to fund acquisitions to supplement its R&D, positioning it well to commercialize quantum computing advancements. Its commercialization plans are clearer, aiming for integration into future internet and computing infrastructure.
Rigetti, being leaner and focused on engineering speed advantages, is considered a potential "dark horse" due to its technical leaps but faces higher execution risk. Both companies aim for quantum advantage with systems of over 1,000 qubits expected in the next few years, but the ultimate winner will be the one who converts technical strengths and funding into indispensable products.
Investment Consideration
Overall, IonQ is generally viewed as the better investment currently due to its stronger financial performance, clearer commercial outlook, and recent technological progress narrowing previous speed disadvantages. Rigetti remains an intriguing but riskier alternative, offering potential high rewards if its technical advances translate into viable products and scale.
Investors should carefully consider their risk tolerance and keep in mind the early, volatile nature of the quantum computing sector. It is recommended to wait for a dip in IonQ's share price and for its Q2 results to validate it's on a trajectory to hit 2025 sales targets before deciding to pick up shares.
The chart from YCharts shows Rigetti's P/S multiple has skyrocketed and is far higher than IonQ’s, suggesting Rigetti stock may be overpriced, making IonQ the better value.
IonQ and Rigetti Computing are prominent players in the quantum computing sector, each with unique advantages and challenges. The quantum computing market size was $4 billion in 2024 and is predicted to grow to $72 billion by 2035, making it a promising area for investment.
References:
- Quantum Computing Report
- Seeking Alpha
- Bloomberg
- The Economist
- YCharts
- In light of the financial performance analysis, IonQ's strong sales and revenue projections set it apart, making its stock comparatively attractive, despite a higher valuation compared to Rigetti.
- When it comes to market potential, IonQ, with its substantial cash reserves and clearer commercialization plans, appears to be in a favorable position to capitalize on quantum computing advancements and integrate its technology into future internet and computing infrastructure.
- For those seeking investment opportunities in the quantum computing sector, the chart from YCharts shows that IonQ, with a lower P/S multiple compared to Rigetti, could potentially offer better value, especially considering IonQ's promising financial performance, technology advancements, and commercial outlook.
