Better Quantum Computing Stock: Rigetti Computing vs. IonQ

After the rapid rise of the artificial intelligence (AI) industry, the next hot sector could be quantum computing. Quantum technology holds the potential to transform industries to even greater degrees than AI.

Quantum machines use subatomic particles to perform calculations at speeds impossible for today’s computers. This can enable breakthroughs in medicine, energy, manufacturing, and many other industries.

Among the businesses working in the field are pure-play quantum companies Rigetti Computing (NASDAQ: RGTI) and IonQ (NYSE: IONQ). Both hold the promise of significant business growth as the quantum computer industry evolves.

Read on to learn more about Rigetti and IonQ, and see which one makes for a superior quantum computing investment.

Rigetti Computing’s shares have experienced jaw-dropping performance, rising more than 300% over the past 12 months through Feb. 27. The increase was due primarily to investor optimism for quantum computing’s potential.

The company’s technology uses superconducting qubits, a more common quantum computing method compared to the newer trapped ion approach used by IonQ. Rigetti also employs solid-state fabrication in constructing quantum machines, which facilitates customer adoption by using existing semiconductor industry standards.

However, Rigetti suffers from the same challenges as every other quantum computing business. Subatomic particles are prone to calculation errors. This means errors must be corrected, limiting the ability of quantum devices to scale up. So while these machines hold tremendous potential, they are not capable of replacing today’s computers yet.

Consequently, Rigetti’s business performance has been lackluster. In the third quarter, the company reported revenue of $2.4 million, a 23% drop from 2023’s $3.1 million. This represents the second consecutive quarter of year-over-year sales declines, which is a concerning trend.

Not only that, Rigetti’s Q3 cost of revenue rose 41% year over year to $1.2 million. The combination of declining sales and rising costs resulted in Q3 gross profit falling nearly 50% to $1.2 million, compared to 2023’s $2.3 million. As a result, Rigetti suffered a Q3 net loss of $14.8 million.

IonQ is building networking technology to solve the challenge of scaling up quantum machines. This involves linking multiple quantum computers together, the same approach used in conventional computing to create AI. Based on its business growth, the company’s efforts are working, contributing to its stock surging more than 140% over the past year through Feb. 27.

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