Two popular stocks among tech investors lately are Rigetti Computing (NASDAQ: RGTI), which makes quantum computing hardware and software, and the semiconductor company Nvidia (NASDAQ: NVDA). While Nvidia is a much more direct bet on the booming artificial intelligence (AI) market, Rigetti's quantum computing systems are integrated into some existing AI.

Both stocks have soared, too, with Rigetti up 34% and Nvidia skyrocketing 342% over the past three years, compared to the S&P 500's 15% rise. But, which is the better AI stock for long-term investors? Let's take a look.

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What's happening with Nvidia?

If you're in the market for an AI stock, it's hard to beat Nvidia. All major global tech companies have ramped up their data center spending over the past few years as they compete for artificial intelligence dominance.

That's led to a bonanza of data center spending and rising demand for the processors in them. The result has been a boon for Nvidia's chip sales. Revenue from its data center segment soared 142% in fiscal 2025 to $115 billion, and the company's non-GAAP earnings soared 130% to $2.99 per share.

It's also given Nvidia a massive lead in the AI data center processing space, with an estimated 70% to 95% market share. And the AI boom isn't over yet. Nvidia CEO Jensen Huang thinks tech companies will invest $2 trillion in AI data center spending over the next few years, which could lead to even more demand for Nvidia's advanced processors.

The company is well-positioned to benefit from its latest AI processor, Blackwell, which has already spurred strong demand from tech giants and resulted in $11 billion in sales, the company's "fastest product ramp."

What's happening with Rigetti?

Quantum computing offers investors a compelling opportunity because the ramifications of the technology could advance everything from materials science to disease prevention and climate science. Unlike traditional computers, which process bits as either 0s or 1s, quantum computers use qubits, which can be either 0 or 1, or both simultaneously.

That allows them to scale hypothetical scenarios much faster than traditional computers, although sometimes at the cost of making more mistakes. Rigetti makes hardware, software, and quantum cloud computing systems that tap into the massive potential of this market, which could be worth $170 billion by 2040.

Rigetti's comprehensive approach to quantum computing is attractive to investors. It also partnered with some heavy hitters in the cloud space, including Amazon and Microsoft, giving Rigetti's tech real-world credibility (as opposed to theoretical applications that are often associated with quantum computing).

But despite all of the interest in Rigetti, the company's recent financial results weren't impressive, considering sales fell 32% in the fourth quarter to just $2.3 million. That's not a good look for a young quantum computing company that's trying to carve out a niche in a speculative, new market.

Rigetti's share price has soared 639% over the past year, giving its stock an expensive price-to-sales ratio of 147. Investors are now paying a premium for a company whose sales are falling and that's betting on an unproven market.

The verdict: Nvidia is the better AI stock

There's no getting around the fact that all stocks are facing some uncertainty right now. President Trump's tariffs have left the market reeling, and many companies are scrambling to adjust to potential changes. Investors should be more cautious than in the recent past about the potential growth for any company, including Nvidia and Rigetti.

But if you're looking for the better AI stock right now, Nvidia is it. Even if an economic slowdown arises from tariffs, Nvidia has a strong lead in the AI processor market, and tech giants are still clamoring for its chips. AI spending could slow a bit during a downturn, but the spigots won't likely turn off. Tech giants have too much at stake in their race for AI dominance to slow spending too much.

As for Rigetti, I think the stock is simply too speculative. Sure, quantum computing holds a lot of promise, but it could still be years before most companies have real-world uses for the tech. Meanwhile, Rigetti's revenue is tumbling when it should be rising quickly, and its stock is expensive. All of which means it's probably best to leave Rigetti's shares alone right now.

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The cutting edge of innovation runs through the rapidly evolving field of quantum computing. This technology promises to solve complex problems at unprecedented speeds, far exceeding the capabilities of classical systems.

Recent breakthroughs from industry leaders IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI) have moved concepts of quantum mechanics from theoretical into real-world commercial applications. Quantum computing is already big business, generating rapid growth in what experts predict could represent an annual market valued at upward of $170 billion by 2040.

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Let's explore whether IonQ or Rigetti Computing is the better quantum stock right now.

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The case for IonQ

With a market capitalization of $5.4 billion, IonQ is the largest pure-play quantum computing stock in the market, more than double the size of Rigetti's $2.3 billion valuation.

The company stands out with its unique trapped-ion technology -- holding ions precisely in 3D space using a custom-designed ion trap to leverage electrically charged atoms as qubits, the fundamental unit of information in its quantum system that uses the principles of superposition, entanglement, and inference to process information.

Unlike superconducting qubits used by Rigetti and International Business Machines, which require cooling of the circuits to subfreezing temperatures, IonQ's approach avoids this.

Its architecture tackles a key challenge in quantum systems, where increasing the number of qubits to boost computational power leads to higher error rates and system instability. With the ability to operate at room temperature as a key advantage, IonQ's latest Forte Enterprise system, with 36 algorithmic qubits, is the company's most powerful single core quantum processor and is positioned for scalable, practical quantum solutions.

The financial trends have been impressive. In 2024, IonQ's net revenue reached $43.1 million, up 96% year over year for the period ended Dec. 31.

The company counts on several major customers representing industries that are embracing quantum computers in fields like pharmaceutical drug discovery, logistics optimization, and engineering simulations. IonQ also partnered with major cloud-computing providers such as Microsoft and Amazon to offer quantum computing as a service.

The company is not yet profitable, but IonQ's attraction as an investment is its hypergrowth trajectory. For 2025, it expects revenue to nearly double to $97 million, with management citing strong interest in its rack-mounted, data-center-friendly quantum computers.

Investors convinced IonQ is still in the early stages of a significant long-term opportunity have plenty of reasons to buy and hold the stock for the long run.

The case for Rigetti Computing

Although IonQ's trapped-ion technology may have a near-term commercial advantage, Rigetti Computing positions itself for long-term dominance through its vertically integrated business model that allows it to control everything from chip design and manufacturing to software development and cloud delivery.

The company operates Fab-1, the industry's first dedicated quantum foundry, enabling precise control over its proprietary chip fabrication, which could be a more cost-effective strategy over time. Rigetti's in-house manufacturing and modular architecture enable scalable, high-qubit-count systems, potentially surpassing IonQ's performance.

According to Rigetti, its superconducting qubits achieve ultra-fast gate speeds of 60 to 80 nanoseconds, up to four orders of magnitude faster than ion-based systems, making them ideal for applications requiring rapid quantum operations.

Despite weaker financial momentum, with Rigetti generating just $10.8 million in 2024, the company's latest 84-qubit Ankaa-3 system is expected to accelerate growth. Market optimism in Rigetti's potential is reflected in the 700% stock price gain over the past year, even outperforming IonQ's 250% return over the same period at the time of this writing. With a balance sheet cash position of $217 million as of the last report, Rigetti has the financial flexibility to pursue its strategic objectives.

Investors who believe Rigetti's superconducting quantum technology will evolve into the industry standard may find its stock has plenty of upside potential.

Decision time: IonQ has an edge

IonQ and Rigetti Computing are at the forefront of the transformative quantum computing industry. However, IonQ emerges as the better quantum stock right now, with a more compelling growth outlook.

Amid the challenging economy, I expect the stock to remain volatile, with 2025 being a pivotal year for the company to reaffirm its operational and financial strategy. For investors with a long time horizon, building a small position in IonQ through a dollar-cost averaging strategy can work within a diversified portfolio to mitigate near-term risks.

Should you invest $1,000 in IonQ right now?

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Rigetti Computing (NASDAQ: RGTI) has caught the eye of many tech investors over the past couple of years as the quantum computing market has taken shape. The company is knee-deep in this market, designing and manufacturing quantum computing units and systems, as well as running a quantum computing platform application development.

Quantum computing hardware and software could be a $170 billion market by 2040, and the enthusiasm around this space has caused Rigetti's share price to surge 588% over the past year. But despite those gains, the company isn't profitable, and sales tumbled 32% in the fourth quarter to $2.3 million.

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Rigetti's skyrocketing share price means the stock now has a price-to-sales ratio of 147. That's a staggering valuation, and coupled with the company's losses and falling sales, it's probably best for investors to look elsewhere. Here are two great tech companies to choose from, both tapping into another large tech trend: artificial intelligence.

Image source: Getty Images.

1. Taiwan Semiconductor

Taiwan Semiconductor (NYSE: TSM), also known as TSMC, is currently one of the most important artificial intelligence companies because it manufactures an estimated 90% of all advanced processors and is a critical production partner for AI leaders such as Nvidia.

Technology companies have gone all-in on an AI race, and many of them are spending hundreds of billions of dollars to build huge data centers that will serve as their artificial intelligence foundation for years to come. The ramp-up in spending resulted in TSMC's revenue rising 42% to $25.5 billion and earnings per American Depository Receipts (ADR) popping 60% to $2.12 in the first quarter (which ended March 31).

It's worth mentioning that there are some uncertainties around continued data center spending because of the recent tariff announcements, and TSMC could face potential issues if and when a specific semiconductor tariff is announced.

Still, no other company has such a strong position in AI chipmaking, and not many companies even have the technical capabilities to produce some of the most advanced processors the company makes. Even amid the backdrop of tariffs, Taiwan Semiconductor could still win over the long term, as tech companies are expected to spend an estimated $2 trillion on AI data centers over the next few years.

2. Microsoft

Microsoft (NASDAQ: MSFT) was an early mover in AI with its investment in ChatGPT creator OpenAI, and has since integrated the chatbot into many of its services under its Copilot brand. This has helped Microsoft stay on pace with other competitors in the AI software space and expand its potential in new areas like agentic AI.

AI agents, which can work on their own to complete tasks like online shopping or making reservations, could grow into a multitrillion-dollar market over the next few years.

Still, Microsoft's biggest AI opportunity comes from its strong position in cloud computing. Microsoft is the second-largest public cloud company after Amazon, with 21% of the market compared to 30% for its rival. Microsoft has closed that gap significantly over the past few years, as many developers and companies have chosen its Azure platform.

Azure's sales rose 31% in the company's second quarter (which ended Dec. 31), and that demand could increase in the coming years. Goldman Sachs estimates that AI cloud computing sales could reach $2 trillion by 2030.

Microsoft won't have to wait around to see the benefits of all these AI opportunities, either. The company's annual AI revenue run rate is now $13 billion, a massive 175% increase year-over-year. With Microsoft integrating one of the most advanced AI chatbots into its services and benefiting from the growth of AI cloud services, the company is well-positioned to tap into artificial intelligence for years to come.

Of course, as with buying any stock right now, investors should know that President Trump's tariffs will likely cause more uncertainty in the markets and could cause an economic slowdown. If you have many more years before retirement, you can likely ride out some of the short-term volatility with these companies, but investors closer to retirement may want to look for alternatives outside of the tech space for now.

Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?

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Investors have spent the past couple of years acquainting themselves with artificial intelligence (AI) and quantum computing. These emerging technologies could represent the most significant leaps forward for humankind since the internet decades ago.

Of course, such groundbreaking technologies can be lucrative investment opportunities. The Defiance Quantum ETF (NASDAQ: QTUM) could be a smart way to add exposure to artificial intelligence and quantum computing to your portfolio.

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The exchange-traded fund has plunged nearly 20% from its high amid the market's recent volatility, one of its steepest declines since it began trading in 2018.

Here are three reasons to buy this AI quantum computing stock on the dip.

1. Quantum computing and AI have significant growth potential

It's impossible to predict what AI and quantum computers could make possible over the coming decades. You might see things you only thought were possible in science fiction. Humanoid robotics is already on the way, which reminds me of a famous action movie from the 1980s featuring a particular cyborg sent from the future.

Plus, AI and quantum computing could eventually be worth trillions of dollars. Research from McKinsey estimates AI could generate $23 trillion in annual economic value by 2040. Meanwhile, quantum computing could start slowly. Technology experts have speculated that practical quantum computers could still be several years away.

However, they could be a game changer once they get here. Boston Consulting Group's report on quantum computing forecasts that quantum computers will create $5 billion to $10 billion in annual economic value by 2030, but projects this to increase to $450 billion to $850 billion by 2040. Time will tell how accurate such estimates and timelines are, but the financial and real-world potential is exciting, to put it mildly.

2. An ETF means you don't have to pick winners

AI and quantum computing present quite a challenge for investors. Most individuals, let alone professional investors, aren't experts in these complex fields.

Therefore, picking individual winners could prove extremely challenging. That's a great reason to invest in a diversified instrument such as the Defiance Quantum ETF. It represents a global basket of 70 companies involved with AI and quantum computing -- someone else did the hard work of picking high-quality stocks in these advanced technology industries.

The fund's top holdings include:

Data source: Defiance ETFs.

Since AI and quantum computing have immense potential but are still so unpredictable, casting a wide net is a wise strategy. It could be a case of the 80-20 rule, where a select few companies produce a majority of the value in AI and quantum computing.

The ETF's construction spans various companies, industries, and countries, reducing risk by limiting the top holding to just 3.31% of the fund's total assets. Additionally, the expense ratio (0.4%) appears reasonable, considering the simplicity and diversification you gain in return.

3. The Defiance Quantum ETF has outperformed the market

Many quantum computing stocks have been highly volatile, and investors who bought at the wrong time have endured steep losses.

The Defiance Quantum ETF has been around since 2018, and has outperformed the Nasdaq Composite, a prominent technology-leaning U.S. stock market index, since about 2021:

QTUM Total Return Level data by YCharts

Past performance does not guarantee future results, but it demonstrates the effectiveness of a diverse approach to speculative industries like AI and quantum computing. I don't see why the Defiance Quantum ETF can't continue to perform well as these technologies mature.

Should you invest $1,000 in ETF Series Solutions - Defiance Quantum ETF right now?

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Quantum computing specialist Rigetti Computing (NASDAQ: RGTI) has been through a lot in recent months. As of this writing on April 7, the stock is down 61% from January's all-time high. But if you shift your focus to a six-month view, Rigetti has gained a staggering 1,014% in that period.

The company didn't exactly earn its skyrocketing price jump, but the recent drop isn't Rigetti's fault either. Forces way beyond Rigetti's control are playing Wall Street lacrosse with the stock. So what's going on, and is this price dip a good time to buy Rigetti stock?

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The story so far

I'm sure you know the good part. Fellow quantum computing expert Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) developed a new chip with superior error correction in early December. This large step forward helped Alphabet's Google Quantum AI team crush a performance benchmark to smithereens, making modern supercomputers look frozen in time by comparison. This warmly welcome sign of progress sent all quantum single-focus computing stocks skyward, including Rigetti.

But the fun didn't last forever. In January, just a month after the error-correcting breakthrough, Nvidia (NASDAQ: NVDA) CEO Jensen Huang said that truly useful quantum computers were still many years away. Two decades looked like a reasonable estimate in Huang's mind.

And he should know, since Nvidia also competes in this market with a focus on connecting today's digital technology to tomorrow's quantum computers. Huang isn't some anonymous third-party analyst, but a business leader with his fingers deep in the quantum computing pie. He wants to have a large slice of it in the long run.

That statement took the wind out of Rigetti's stock sails, as it did for the other pure-play quantum computing stocks. Huang hit the reset button on this sector's dreams of quick development and nearly immediate riches.

On top of that bubble-popping event, the market isn't terribly fond of speculative growth stocks with negative earnings right now. The growth-oriented Nasdaq Composite (NASDAQINDEX: ^IXIC) market index is down 21.5% in the last three months, with about half of the pain accumulating on Thursday and Friday of last week. Tariffs may not slow down Rigetti's quantum computing research directly, but anything that limits the broader economy's access to borrowed funds could be bad news. Without free-flowing capital, Rigetti and its peers might have a hard time landing business-generating contracts.

Rigetti's stock has actually held up better than the Nasdaq Composite index over the last month, hanging on with a 2.3% price drop while the index plunged 13.7%. But the picture changes dramatically if I adjust that chart by a single day, and the comparative chart looks like this after shifting the time frame by a full week:

RGTI data by YCharts

Rigetti's wild ride

All right, so Rigetti soared thanks to Google's research breakthrough and then started to fall because of a modest analysis by Nvidia's management. The economic backdrop isn't helping. Where does Rigetti's stock land on the scale of "ridiculously cheap" to "way too expensive" today, then?

I'm afraid Rigetti's stock is much too hot to touch at this point. The 61% price drop is a good start, but very far from "good enough."

Even now, Rigetti shares trade at 142 times trailing sales, making even Nvidia's ratio of 18 times sales look affordable. I'd love to talk about profit-based metrics, but Rigetti is burning cash at the rate of $61.7 million per year. At this rate, it could run out of cash reserves in less than three years -- long before quantum computers are supposed to gain game-changing powers.

The company could become a buyout target along the way, or it might sign long-term contracts with plentiful revenue streams in a forward-looking perspective. Otherwise, I expect Rigetti to dip into unwelcome cash sources such as dilutive stock sales or expensive debt papers.

Is Rigetti worth the risk? I'm afraid not.

It's far too early to pick long-term winners among the handful of small and unprofitable quantum computing experts. But you may have noticed that established tech titans like Alphabet and Nvidia have serious interests in this technology, too. Those are the stocks I would pick if I wanted a low-risk connection between quantum computing and my stock portfolio. I can't even pin a target price on Rigetti where I might be interested in pecking at the single-market expert.

Like I said, Rigetti has a long way to go before it can make investors' dreams come true. Many things can go wrong on the way.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet and Nvidia. The Motley Fool has positions in and recommends Alphabet and Nvidia. The Motley Fool has a disclosure policy.