Investors are evaluating IonQ and Rigetti Computing, two early movers in the quantum computing market, to determine which represents a better investment opportunity.
Investors assess IonQ vs. Rigetti for better opportunities
IonQ offers three types of quantum computing systems: the Aria quantum system, the Forte system, and the Forte Enterprise system. The company markets its products and services primarily to government clients and universities while also providing its quantum computing power as a cloud-based service. IonQ is developing “trapped ion” technology aimed at shrinking the size of its quantum processing units (QPUs) from a few feet to a few inches, which could lead to more affordable and powerful systems in the future. Despite a setback from the unexpected departure of co-founder and chief scientist Chris Monroe, IonQ has continued to grow, installing more systems and securing new government contracts and AI partnerships.
Rigetti, on the other hand, designs and manufactures its own QPUs and allows developers to write custom quantum algorithms on its Forest cloud platform, which positions it as a “full stack” quantum computing company. Following the abrupt resignation of founder Chad Rigetti from his executive roles in December 2022, the company launched two significant products. In December 2023, Rigetti introduced its Novera QPU, a commercial model that contains 9 qubits at a cost of $900,000, which has attracted orders from major government and research entities. Rigetti also deployed its first 84-qubit Ankaa-3 system, capable of detecting over 99% of processing errors, and plans to release a 100-qubit system with an even higher error detection capability this year.
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Both IonQ and Rigetti went public through special purpose acquisition companies (SPACs) but fell short of their pre-merger revenue targets. IonQ reported $22 million in revenue for 2023, below its goal of $34 million, while Rigetti generated only $12 million, also missing its $34 million target. Despite these setbacks, their stocks reached all-time highs in December 2024 due to positive market sentiment regarding their progress. Analysts forecast IonQ’s revenue will grow at a compound annual growth rate (CAGR) of 89% to reach $148 million by 2026, while Rigetti’s revenue is expected to grow at a CAGR of 43% to $35 million by the same year.
Both companies are projected to remain unprofitable for the foreseeable future and may need to dilute their shares to raise cash and manage stock-based compensation. Since its SPAC merger, IonQ has increased its share count by 10%, whereas Rigetti’s share count has risen by 69%. IonQ’s enterprise value stands at $8.8 billion, equating to 59 times its estimated 2026 sales, while Rigetti’s enterprise value of $4.3 billion implies 123 times its anticipated 2026 sales.
The quantum computing sector is anticipated to expand at a CAGR of 34.8% from 2024 to 2032, driven by advancements in chip size and error detection efficiency. Both IonQ and Rigetti are positioned to capitalize on this growth, but their current valuations warrant cautious investment considerations. However, IonQ’s superior scale, higher projected growth rates, lower dilution, and more favorable valuation suggest it stands out as a better buy compared to Rigetti at this time for most analysts.
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Featured image credit: Kerem Gülen/Ideogram
