Quantum computing could make it easier to process massive amounts of information in the near future. Unlike traditional computers, which still store data in binary bits of zeros and ones, quantum computers can store them simultaneously in qubits.
That approach enables quantum computers to process data much faster than binary computers, but the ones in operation now are also larger, more expensive, and consume more power while making more mistakes than binary computers. Those shortcomings are preventing quantum computers from being used for mainstream applications, so they're still mainly used for niche research purposes.
Image source: Getty Images.
But over the next few years, companies are working to make quantum computers smaller, less expensive, and more accurate as the technology improves. According to Fortune Business Insights, the quantum computing market could still expand at a compound annual growth rate (CAGR) of 34.8% from 2024 to 2032 -- so this industry's early movers might be future multi-baggers.
Two of those early movers, Rigetti Computing (RGTI 5.98%) and D-Wave Quantum (QBTS 6.93%), saw their stocks surge nearly 470% and 390% over the past 12 months, respectively, as the market attracted a stampede of bulls. But should investors chase either of those high-flying stocks right now?
The similarities and differences between Rigetti and D-Wave Quantum
Rigetti designs and manufactures its own quantum processing units (QPUs), builds full quantum computing systems, and hosts a developer-oriented cloud infrastructure platform for quantum computing applications. That vertically integrated approach makes it a "full stack" play on the quantum computing market. It serves big customers like the Superconducting Quantum Materials and Systems Center (SQMS), Air Force Research Lab (AFRL), and Horizon Quantum Computing in Singapore.
It launched the Novera QPU, a 9-qubit commercial version of its quantum computer that costs about $900,000, in late 2024. It also recently deployed its first 84-qubit Ankaa-3 quantum computing system, which can detect over 99% of its errors (known as its "median gate fidelity" ratio), to support its cloud-based platform.
This year, it plans to launch a new modular quantum computing system that links together four 9-qubit chips to create a 36-qubit system with a median gate fidelity of 99.5%. It also aims to deploy a non-modular system with more than 100 qubits by the end of 2026, and an even more powerful 336-qubit system within the next few years.
NASDAQ: RGTI
Key Data Points
D-Wave Quantum carved out its niche with its quantum annealing tools, which help organizations optimize their workflow, schedules, supply chains, and logistics networks. It achieves that like an automated efficiency expert that maps out large amounts of data to find the solutions that require the least computing power.
It sells both its own hardware and its own cloud-based services through its Leap quantum platform, which can be integrated into larger cloud infrastructure platforms like Amazon Web Services (AWS). It also calibrated its new 4,400-qubit Advantage2 processor -- which solves complex 3D lattice problems 25,000 times faster than its current Advantage processor -- last November. That upgrade could help it optimize its clients' operations much more efficiently.
It's already signed on big clients like Deloitte, Mastercard, Lockheed Martin, and Accenture, and it could continue to attract more customers with its focus on using quantum computing for more practical applications.
NYSE: QBTS
Key Data Points
Both stocks trade at nosebleed valuations
Rigetti and D-Wave both have promising strategies for the quantum computing market, but a lot of that future growth has already been priced into their high-flying shares. Rigetti and D-Wave have enterprise values of $2.83 billion and $3.09 billion, respectively, but this is how much revenue they're expected to generate through 2027.
| Metric | 2025 | 2026 | 2027 |
|---|---|---|---|
| Rigetti revenue (growth rate) | $14.0 million (30%) | $33.6 million (140%) | $49.7 million (48%) |
| D-Wave revenue (growth rate) | $22.4 million (1%) | $34.4 million (54%) | $72.1 million (109%) |
Data source: Marketscreener. Note: Dollar figures are estimates and growth rates are year over year.
Therefore, Rigetti already trades at 57 times its projected sales for 2027, while D-Wave trades at 43 times that estimate. Investors should also take those estimates with a grain of salt, since the quantum computing market remains in its infancy.
Furthermore, both companies are also expected to stay unprofitable for at least the next three years, and they've been severely diluting their existing investors with high stock-based compensation expenses and secondary offerings to raise fresh cash. Over the past 12 months, Rigetti and D-Wave increased their outstanding shares by 73% and 80%, respectively, and that dilution should continue for the foreseeable future.
During that past year, Rigetti's insiders sold nearly 4 times as many shares as they bought, but D-Wave's insiders bought 8% more shares than they sold. That warmer insider sentiment suggests D-Wave might have a bit more upside potential.
Should investors buy either of these stocks right now?
I personally wouldn't buy either of these quantum computing stocks at these sky-high valuations. But if I had to choose one over the other, I'd invest in D-Wave Quantum because its growth is accelerating, its stock is slightly cheaper than Rigetti's, its insiders are still net buyers, and its technology seems better suited for mainstream customers than research institutions.
