Chicago, IL – January 16, 2025 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: NVIDIA Corporation NVDA, Microsoft Corporation MSFT, Rigetti Computing, Inc. RGTI, IonQ, Inc. IONQ and Alphabet Inc. GOOGL.
Here are highlights from Wednesday’s Analyst Blog:
The Better Quantum Computing Stock to Buy Now: RGTI or IONQ
Artificial intelligence (AI) is undoubtedly a growing field, and investors always tend to think about graphic processing unit (GPU) makers like NVIDIA Corporation and AI-driven cloud behemoths such as Microsoft Corporation.
However, quantum computers are the next big thing in the tech space, as they can use quantum mechanics to help with AI workloads and solve problems faster than traditional ones.
As a result, some big players in the quantum computing space such as Rigetti Computing, Inc. and IonQ, Inc. saw mammoth gains in the last six months of 2024.
The growing acceptance of quantum computers for pharmaceutical enhancements, derivative pricing and technological advancements is expected to drive the global quantum computing market to $5.3 billion in 2029 from the current $1.3 billion at a CAGR of 32.7%, per marketsandmarkets.
Thus, with the quantum computing market poised to expand, investors may wonder whether Rigetti or IonQ is the better stock choice. Let’s see –
Rigetti or IONQ: Which Company Has a Better Future?
Rigetti focuses on the infrastructure side by designing cost-effective and scalable quantum processing units (QPU). Rigetti’s Novera QPU is already in high demand among commercial customers, while the company aims to manufacture a powerful 100-qubit system that can detect almost all processing errors.
The Rigetti stock hit a record high in December 2024, and analysts expect its revenues to witness a CAGR of 43% to $35 million from 2023 to 2026 (read more: Is Under $10 RGTI Stock the Next 2025 NVIDIA, and Is It a Buy?).
Similarly, IonQ’s stock also touched an all-time high last month, and its revenues are expected to experience a CAGR of 89% to reach $148 million in the same period. This is because IonQ is working on trapped ion tech to possibly reduce the size of a QPU from feet to inches, which could lead to more powerful quantum computers in the long run.
IonQ is also positioned to grow on the back of new AI partnerships and new government contracts. Thus, both quantum computing stocks exhibit growth potential.
How to Trade Quantum Computing Stocks – Rigetti & IONQ
Initially, buying Rigetti and IonQ stock may appear to be a good move. However, investors should be cautious about their lofty valuations as Rigetti trades at approximately 123X projected 2026 sales, while IonQ is at about 59X its estimated 2026 sales.
Moreover, quantum computing is a nascent capital-intensive business, and both Rigetti and IonQ may face the risk of running out of cash in handling operational hazards. Even though the quantum computing market is growing, it may take years for major players in this field to generate profit.
As rightly said by NVIDIA CEO Jensen Huang, a minimum of 15 years will take for quantum computers to be commercialized and that may lead to losses for quantum computing stocks. In the future, Google-parent Alphabet Inc. is more likely to win the quantum computing race due to its vast resources.
Hence, investors should adopt a wait-and-watch approach before investing in Rigetti and IonQ stocks. Currently, both stocks have a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
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