Quantum computing stocks are still quite hot in the market, although their week-to-week performance can be incredibly volatile. For example, one of the more popular quantum computing plays, Rigetti Computing (RGTI 9.35%), set a new all-time high right at the end of 2024, but plunged 70% just a few weeks into 2025. Now, it's only off around 40% from its all-time high. One of its peers, IonQ (IONQ 6.65%), has also seen extreme volatility, although not quite the same level as Rigetti.
Of these two, is one a more attractive stock to buy? Although quantum computing is still a few years away from being widely used commercially, any quantum company could have a breakthrough at a moment's notice, and send shares soaring. That alone is enough to get some investors excited about the stocks, but I think there's one pick that might prevail in this analysis.
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Both companies have taken steps to ensure they have adequate cash on hand
Both IonQ and Rigetti are quantum computing start-ups that rely on external funding to continue their operations. Both companies have issued more shares, taken on debt, and received contracts for their work. Basically, any funding source that's outside of actual profitability. Until these companies can prove quantum computing's relevance to everyday problems, they will be in this external funding state, which makes examining cash piles and resource burn critical.
Free cash flow (FCF) is an excellent measure of understanding how much cash is burning each quarter, as it utilizes operating cash flow and subtracts capital expenditures from that figure as well. For unprofitable companies like IonQ and Rigetti Computing, this allows investors to understand how long their current cash pile would last if operations continued in their present state.
IONQ Free Cash Flow (Quarterly) data by YCharts
IonQ has around 16 quarters of cash left, and Rigetti has about 13 quarters left. However, Rigetti Computing is also undergoing a capital raise, as it is issuing enough stock to generate $350 million in additional funds for the company. This will ensure the company's finances and allow it to invest more aggressively in its quantum computing capabilities.
Both companies believe that 2030 will be a turning point for quantum computing. IonQ believes it will be profitable by then, and Rigetti points out that the quantum computing market will dramatically expand in the decade following 2030.
That's still five years away, so is there a clear leader in the quantum computing arms race between the two?
Predicting the future of quantum computing is nearly impossible
Both companies offer full-stack quantum computing solutions, offering everything a potential client would need to run a quantum computer. This includes the hardware and software necessary to run quantum computing workloads. As a result, they are direct competitors with each other. However, these two are also competing against some of the biggest tech behemoths in the world, including Alphabet (GOOG 1.40%) (GOOGL 1.28%) and Microsoft (MSFT +0.90%). Both Alphabet and Microsoft can afford to invest billions of dollars into quantum computing if they want, and easily outspend or acquire a company like IonQ or Rigetti Computing.
This makes them formidable competitors, and they are ones to keep an eye on as well.
NYSE: IONQ
Key Data Points
As for IonQ versus Rigetti Computing, it's incredibly difficult to assess whether one is beating the other in the quantum computing arms race. The best way to look at it is which company has the best 2-qubit gate fidelity, which measures how accurate a quantum computer is. IonQ has achieved 99.9% fidelity, while Rigetti Computing is at 99.5%. While that's fractions of a percent better, the amount of work necessary to go from 99.5% to 99.9% is large.
As a result, I think IonQ is likely a better pick than Rigetti. However, both companies are approaching the quantum computing arms race differently, with Rigetti Computing utilizing superconducting technology while IonQ uses trapped ions. There could be a fundamental flaw in either one of these approaches that nobody has discovered, causing every company that's taken that path to immediately fall behind in the quantum computing arms race.
NASDAQ: RGTI
Key Data Points
As a result, I think you're better off owning a basket of quantum computing stocks than just picking one or two winners. Over the long term, owning Rigetti, IonQ, Alphabet, and Microsoft will provide better results than throwing a dart and picking a random quantum computing company. We're still far from determining a winner, and there's no guarantee that any of the companies mentioned above will win the race. It could be countless other companies that are also trying to develop a quantum computing solution. Because of that, investors should spread their risk out among multiple picks, as companies like IonQ or Rigetti Computing will likely be worthless if they lose the quantum computing race to someone else.
