A potential game-changing technology stepped fully into the spotlight in 2025. The evidence is in the skyrocketing stock prices of pure-play companies focusing on this technology.
I'm referring, of course, to quantum computing. Rigetti Computing (RGTI +1.44%) is an excellent example of a stock that took off amid investor excitement over the potential of quantum computing.
However, 2026 could be the year of the quantum reality check. Investors may be better off focusing less on up-and-coming quantum computing stocks like Rigetti and instead placing their bets on quantum veterans with real cash flow, such as IBM (IBM 0.61%).
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Rigetti's real promise – and real risks
Don't get me wrong. I believe that quantum computing is as exciting as advertised. It holds the potential to accelerate artificial intelligence (AI) advances, transform drug discovery, and revolutionize multiple areas, including materials science, logistics, and weather forecasting.
I also believe that Rigetti Computing's quantum technology shows real promise. The company's focus on superconducting quantum computing is pragmatic. Its Cepheus-1-108Q system, which supports 108 qubits, is poised to be the largest modular quantum computing system upon its general availability at the end of the first quarter of 2026.
Rigetti's manufacturing capabilities also give it an edge. The company built the first dedicated foundry for the fabrication of quantum integrated circuits. Rigetti makes a compelling argument that its design and fabrication are best-in-class.
However, Rigetti's risks are also real. The company continues to lose money. Its revenue in the latest reported quarter was a meager $1.9 million. Perhaps most importantly, Rigetti is competing with formidable rivals, several of whom are also using the superconducting approach to build quantum computers.
Big Blue has big plans – and big money
IBM is one of Rigetti's formidable rivals. Its quantum computing business has more than 300 clients and partners, including Boeing (BA +0.97%), Cleveland Clinic, Oak Ridge National Laboratory, and Wells Fargo (WFC +1.34%).
The tech pioneer developed Qiskit, the world's most widely used open-source software stack for quantum computing. While Rigetti pushed back the launch of its 108-qubit Cepheus-1-108Q system, IBM has already released its Quantum Nighthawk QPU that supports 120 qubits.
2026 will be the year that quantum advantage (which IBM defines as where a quantum computer can solve a practical problem "more accurately, cheaply, or efficiently than a classical computer") is achieved, according to Jay Gambetta, Director of IBM Research. IBM also has an ambitious roadmap over the next few years. The company plans to build a fault-tolerant 200-qubit quantum computer by 2029. Beyond 2033, IBM believes it will have powerful systems that support up to 2,000 qubits.
Notably, IBM has the money to fund its quantum computing goals. The company's revenue is growing across all business segments. It's highly profitable. IBM expects to report free cash flow of around $14 billion for the full year 2025. At the end of the third quarter of 2025, the tech giant's cash position stood at $14.9 billion.
The smart money's quantum computing pick
Rigetti Computing could be a huge winner over the long term. However, the company's fortunes and future hinge on its quantum computing technology proving at least as good as its competitors'. There's no guarantee that will happen.
While IBM is investing heavily in quantum computing, it can still be successful even if the quantum bet doesn't pay off as hoped. The company, which got its start making tabulating machines, has done a good job of adapting to the rise of AI.
The race to fulfill the potential of quantum computing will be a marathon, not a sprint. IBM is much better positioned to go the full distance than Rigetti is. That's why when the choice is between these two stocks, IBM is the smart money's quantum computing pick.
