Just as the internet transformed society, quantum computers hold a similar promise. These groundbreaking machines harness quantum physics to perform complex calculations in minutes that would take today's supercomputers centuries.
However, today's quantum computers are error-prone and difficult to scale. The first businesses to construct devices capable of widespread use could revolutionize whole industries. For that reason, quantum computer companies D-Wave Quantum (QBTS -7.50%) and IonQ (IONQ -8.88%) present intriguing investment opportunities.
But is D-Wave or IonQ the superior investment in this nascent sector? An examination of both can help you arrive at an answer.
Image source: Getty Images.
Diving into D-Wave
D-Wave shares have made an impressive run in 2025. The stock is up over 90% this year, hitting a 52-week high of $19.77 in May. Its shares took off because of a massive 509% year-over-year jump in first-quarter revenue, hitting $15 million. To put that in perspective, the Q1 sum alone was far more than D-Wave's total sales of $8.8 million for all of 2024.
The stupendous revenue growth was due to D-Wave's first sale of its proprietary Advantage quantum machine. In years past, the bulk of its revenue came from selling quantum computing as a service (QCaaS), in which customers pay a fee for remote access to the company's quantum capabilities through the cloud.
Thanks to its exceptional revenue, D-Wave's Q1 operating loss improved to $11.3 million from $17.5 million in 2024. The company also boasted a solid balance sheet. First-quarter total assets were $325.6 million with a whopping $304.3 million of that in cash. First-quarter liabilities totaled $118.2 million.
D-Wave management stated that its Q1 cash balance is sufficient to sustain the business until it becomes profitable. Since then, the company further boosted its cash reserves to approximately $815 million through an equity offering. Some of the funds are earmarked for acquisitions.
A look into IonQ
IonQ's 2025 stock performance has been more muted than D-Wave's. Its shares are up 9% through July 9. A contributing factor is IonQ's lackluster Q1 results.
Revenue reached $7.6 million, which was flat compared to 2024. Worse, while revenue failed to grow, expenses certainly did. The company's Q1 operating loss of $75.7 million was a significant increase over the prior year's loss of $52.9 million.
That said, the company has a strong balance sheet. Total Q1 assets were $850.1 million versus total liabilities of just $85 million. On top of that, IonQ announced a $1 billion equity offering on July 7, which should further shore up its finances. IonQ has been on a tear acquiring businesses over the past year as it attempts to build a quantum computing network.
Considering the internet exists because of computer networking, IonQ's approach could be a game changer. But the strategy is expensive, since it must assemble many capabilities to make a viable quantum network. For instance, these networks cannot extend far today, so IonQ acquired Lightsynq Technologies, which is working on tech to expand the range quantum devices can be networked.
Making a choice between D-Wave Quantum and IonQ stocks
While IonQ seeks to build a quantum network, D-Wave claims to be the sole provider of both the prevailing quantum gate technology and quantum annealing, a technique for finding optimal solutions among numerous possibilities.
It's too early to tell whether IonQ or D-Wave's approach will win out over the long run, and that's the challenge in choosing between these two. Either company could become a leader in the field, or it could be a much larger competitor, such as Microsoft, which has developed its own quantum technology called topological qubits.
In addition, D-Wave's sizable Q1 result may be a feat that it won't repeat anytime soon. Its sale of an Advantage system is a departure from the usual QCaaS and professional services revenue, which provided nearly all its income over the past two years.
As for IonQ, it may have experienced an underwhelming Q1, but it exited 2024 with 95% year-over-year revenue growth to $43.1 million. It also expects 2025 sales to reach between $75 million and $95 million, which would represent a substantial jump up from 2024.
Another consideration is the share price valuation of these companies, which can be assessed with the price-to-sales (P/S) ratio. The chart below shows that the P/S multiples for D-Wave and IonQ are not only higher than a year ago, but considerably greater than Microsoft's. This suggests shares of D-Wave and IonQ are overpriced.
Data by YCharts.
Considering their sky-high valuations and the uncertainty surrounding which quantum computing technology will eventually dominate, the optimal strategy is to wait for Q2 earnings before deciding to buy shares in either company. This lets you see whether D-Wave's Q1 results are a one-off, and if IonQ can bounce back from tepid Q1 sales to achieve its projected year-over-year growth for 2025.
