Beyond Rigetti: Top 3 Quantum Computing Stock Picks

January 21, 2025 at 07:22 AM EST

Quantum Processor — Photo

Just when you may have finally gotten your head around the opportunity in artificial intelligence (AI), a new investment opportunity has popped up. Quantum computing is the latest “new thing” among technology stocks.

Quantum computing is based on quantum theory and physics and aims to make complex computations efficient. Specifically, where traditional computers use bits (i.e., 0s and 1s) to process information, quantum computers use qubits, which can be both 0 and 1 at the same time.

This means that instead of checking each possible solution to a problem one outcome at a time, quantum computers can analyze all possible outcomes simultaneously. To put the opportunity into perspective, you can look at the biotechnology sector. If quantum computers can simulate complex molecular interactions, it will likely bring about faster, more efficient drug development – and perhaps the breakthrough we need for unmet diseases.

Is Now a Good Time to Invest in Quantum Computing Stocks?

The potential of breakthrough discoveries from quantum computing is one of many reasons that quantum computing stocks are surging. However, if you’re an early investor in quantum computing stocks, you likely weren't pleased to hear NVIDIA Corp. (NASDAQ: NVDA) chief executive officer (CEO) Jensen Huang state that practical quantum computers are still up to 20 years away from being reality.

Investors should take the message seriously, but not too seriously, and here’s why. Quantum computing is still in its early stages. The computers that it would take to run these operations in a stable fashion are, as Huang noted, years away.

That means that the pure-play quantum computing stocks are those of companies that are not profitable and have little to no revenue. However, like other technological breakthroughs, there will be incremental progress along the way. And while quantum computing may compete with AI in some areas, it’s more likely to complement it.

As the headline says, this list doesn’t include Rigetti Computing Inc. (NASDAQ: RGTI). The stock is up over 833% in the 12 months ending January 17, 2025. So it’s important to look at other stocks in the sector.

IonQ Is Building a New Mousetrap

If nothing else about qubits is clear, this is the key point to understand. One limitation of quantum computers is the need to operate at sub-zero temperatures. That’s essential to maintain the stability needed to perform their calculations.

That fact gives you a basic reason to consider IonQ Inc. (NYSE: IONQ) as an investment in this space. The company is designing quantum computers that can operate at room temperature. If it can begin delivering its computers at any scale, IonQ could have a significant competitive advantage.

IonQ also has a $54.5 million quantum system contract with the U.S. Air Force Research Laboratory to build a quantum computer. The company is also developing partnerships with companies like AstraZeneca PLC (NASDAQ: AZN). These contracts are critical to ensuring the company can fund its research without diluting shareholder value.

IONQ stock is up 259% in the 12 months ending January 17, 2025. However, investors should remember that this was trading below $10 as recently as September 2024. The 12% pullback since the beginning of 2025 may be only the beginning and may offer speculative investors with long-term ambitions a better entry point.

Arquit Quantum Helps Defend Against the Bad Actors

Arquit Quantum Inc. (NASDAQ: ARQQ) is another quantum computing stock with a unique bull thesis. However, instead of developing quantum computers, Arquit is attempting to defend against them.

Because quantum computers have the potential to unravel traditional encryption methods, there are major implications for cybersecurity companies that are already researching quantum-resistant encryption methods. Arquit helps to protect high-security VPN data transmission through a cloud-based encryption subscription service.

ARQQ stock is up more than 300% in the three months ending January 17. That comes despite the company continuing to burn through cash, which necessitated a 25-for-1 reverse stock split in September 2024.

However, the Arquit Quantum analyst forecasts on MarketBeat give the stock a price target of $52, which is 94% above the $26.77 closing price on January 17. To meet those price targets, the company will have to confirm it’s on the path to projected profitability in 2026.

D-Wave Is Different by Design

When most people describe quantum computing, they’re describing a gate-based model that uses qubits, as described in the introduction. However, quantum computers using traditional gate-based technology are years away.

D-Wave Quantum Inc. (NYSE: QBTS) takes a different approach with its pioneering quantum annealing technology, which it can offer to customers today via the cloud or an on-premise system. Annealing technology analyzes the qubit (or super-positioned atom) and finds its optimal state or “ground state” where it will be at its most stable and can, therefore, perform the calculations.

Like the other stocks in this presentation, QBTS stock has soared since October 2024. However, the stock is down over 37% in 2025. However, it’s getting a little of a lift on the news that it's partnering with Carahsoft Technology to increase the adoption of its annealing technology to the U.S. government and the public sector.

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Beyond Rigetti: Top 3 Quantum Computing Stock Picks

Is Now a Good Time to Invest in Quantum Computing Stocks?

IonQ Is Building a New Mousetrap

Arquit Quantum Helps Defend Against the Bad Actors

D-Wave Is Different by Design

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