Key Points

• IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing have reached valuation levels well beyond those seen during prior stock market bubbles.

• Each of these companies has recently raised capital through a series of equity offerings and stock issuances.

• These moves could suggest that the valuation levels for these businesses are not only abnormally high, but unsustainable.

• These 10 stocks could mint the next wave of millionaires ›

Last summer, companies such as IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) were unknown penny stocks.

However, as quantum computing steadily made its way toward center stage in the artificial intelligence (AI) realm, each of these companies witnessed meteoric rises in their share prices. Over the last 12 months, IonQ stock has blasted higher by 517%, while Rigetti, D-Wave, and Quantum Computing have experienced surges of at least 1,500% as of this writing (July 21).

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With valuations reaching historically high levels, could investors be on the verge of witnessing a quantum computing bubble bursting?

Is quantum computing in a bubble?

The chart below illustrates valuation trends among popular quantum computing stocks on a price-to-sales (P/S) basis.

IONQ PS Ratio data by YCharts.

As I outlined in a prior article, the quantum computing stocks above are trading at far higher P/S multiples compared to levels seen during the dot-com and COVID-19 stock bubbles.

For example, during the internet boom in the late 1990s, stocks such as Amazon, Cisco, and Microsoft experienced peak P/S ratios in the range of 30x and 40x. Taking this a step further, popular COVID stocks such as Zoom Communications and Peloton saw P/S multiples top out at 124x and 20x, respectively.

The big theme here is that IonQ, Rigetti, D-Wave, and Quantum Computing are each trading for valuation multiples that could be seen as historically high, even when compared to prior bubble events.

With that said, other AI companies that are also exploring quantum computing -- such as Nvidia, Amazon, Alphabet, and Microsoft -- currently trade for much more reasonable valuation multiples when compared to the companies in the chart above.

For this reason, I do not think the entire quantum computing landscape is at risk of experiencing a bubble-bursting event. However, IonQ and its peers have been dropping some breadcrumbs in recent months that lead me to think the smaller quantum computing players could be on the verge of a harsh sell-off.

What's going on under the hood with quantum computing stocks?

After some digging into certain filings with the Securities and Exchange Commission (SEC), I think IonQ, Rigetti, D-Wave, and Quantum Computing may be trying to signal some important things to investors:

• In February, IonQ announced that it planned to raise up to $500 million through a series of stock issuances. The company doubled down on its capital-raising ambitions more recently, offering 14,165,708 shares at a price of $55.49 -- raising nearly $1 billion in the process.
• In June, Rigetti raised $350 million in capital after completing an at-the-market (ATM) equity offering.
• Between June 11 and June 27, D-Wave Quantum raised $400 million through an ATM offering. Of note: This followed a prior raise of $150 million that occurred in January.
• In late June, Quantum Computing raised $200 million following the issuance of 14 million shares at an average price of $14.25.

What's really going on here? With each of these quantum computing stocks trading near all-time highs, it appears to me that management is looking to take advantage of frothy market conditions.

IONQ data by YCharts.

Quantum computing is a research-heavy, capital-intensive industry. Management at IonQ and its peers surely understand this, and so I see these capital raises as a calculated move to capitalize on inflated, overstretched valuations.

Should you invest in quantum computing stocks?

To me, any hint of a bubble surrounding IonQ and its smaller peers may already be in the process of bursting. Under the surface, the various stock issuances and equity offerings annotated above could suggest that management does not believe current price levels are sustainable.

By using the dot-com and COVID bubbles as benchmarks, history would suggest that a major correction could be on the horizon for these small quantum computing stocks. Issuing stock to raise funds is not sustainable in the long run. Furthermore, consistently diluting shareholders through these offerings could call into question how these companies are allocating capital.

In my eyes, if investors are seeking exposure to the quantum computing industry, they are best off exploring more diversified opportunities in big tech as opposed to the smaller, more speculative players analyzed in this piece.

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Key Points

• Quantum computing stocks have been on a tear this year, despite the technology's nascent scale and still speculative nature.

• Unlike the broader artificial intelligence (AI) theme, many popular quantum computing stocks are small companies with limited traction.

• While it can be tempting to follow the momentum, several quantum computing stocks boast valuation multiples that echo those seen during prior stock market bubbles.

• 10 stocks we like better than IonQ ›

This year has been tough for investors, particularly those who flock toward growth stocks. Just about every major industry has been impacted in some form or fashion by President Donald Trump's new tariff policies.

While the broader implications of these import taxes are still unfolding, one sector that has faced abnormally large headwinds is technology. For the first time in nearly three years, investing in the artificial intelligence (AI) market hasn't necessarily resulted in outsized gains.

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Nevertheless, one pocket of the AI realm that has managed to circumvent the panic-selling this year is quantum computing. As of this writing (July 17), the Defiance Quantum ETF has gained 17% so far this year -- roughly double the returns seen in the S&P 500 and Nasdaq Composite.

With quantum computing stocks trouncing the broader market, now may be an appropriate time to assess valuations in the sector and compare them to prior periods of heightened enthusiasm.

What is a stock market bubble, and what are some examples?

One of the most basic mistakes investors make is assessing a company's valuation based on its stock price. In other words, if the stock price is low, an investor might mistakenly view the company as "cheap" (and vice versa).

Smart investors understand that there are far more parameters than the share price that help determine a company's valuation. Underlying financial metrics, such as revenue, gross margins, profitability, free cash flow, cash, and debt, should all play a factor in assessing the health of a business.

From there, more sophisticated analysis requires investors to benchmark these figures and their growth rates against a set of peers to get a better sense of how the business in question compares to the broader competitive landscape.

Many investors do not take the time to perform the due diligence exercise above and instead choose to follow broader momentum. Unfortunately, this can lead to abnormally inflated stock prices -- those that are incongruent with the underlying fundamentals of the business.

Generally speaking, reality begins to set in and these companies are unable to sustain their overstretched valuations, eventually leading to harsh, dramatic sell-offs. This phenomenon is known as a stock market bubble.

In the charts below, I've illustrated some valuation trends across two notable stock market bubbles.

AMZN PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

The chart above illustrates the price-to-sales (P/S) ratios for a number of high-flying internet stocks during the dot-com bubble of the late 1990s. As the trends above make clear, each of the companies in the peer set above trades at much more normalized valuation multiples today when compared to their peaks during the internet boom.

ZM PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

Investors witnessed a similar theme in overstretched valuations during the peak days of the COVID-19 pandemic. Companies such as Zoom Communications, Wayfair, and Peloton witnessed abnormal demand for their respective product offerings as remote work became the norm.

As the trends seen above demonstrate, however, these growth tailwinds were not permanent. Today, none of these COVID stocks are seen as compelling growth opportunities, and their cratering valuations are a sobering reminder of the aftermath of bubbles bursting.

How do quantum computing stocks compare to the valuations above?

Over the last year, IonQ (NYSE: IONQ), Rigetti Computing (NASDAQ: RGTI), D-Wave Quantum (NYSE: QBTS), and Quantum Computing (NASDAQ: QUBT) have emerged as popular names fueling the quantum computing movement.

IONQ PS Ratio data by YCharts. PS Ratio = price-to-sales ratio.

With a P/S multiple of over 5,700, the tiny Quantum Computing business is the clear outlier in the quantum computing cohort illustrated above. Even so, Rigetti, IonQ, and D-Wave each boast P/S ratios that are either considerably higher or in line with the darlings of the dot-com and COVID bubbles.

Are we in a quantum computing stock bubble?

The quantum computing stocks referenced above are highly speculative -- arguably even more so than the highfliers during the internet era. Unlike then, today's technology behemoths, such as Amazon, Microsoft, eBay, and Cisco, have evolved into sophisticated platform businesses with diversified ecosystems.

This provides them with the scale and financial flexibility to explore emerging fields such as quantum computing. Smaller players, such as IonQ, Rigetti, D-Wave, and Quantum Computing, currently face intense competition from big tech -- something the dot-com businesses did not.

Given the valuation analyses explored above, many popular quantum computing stocks are clearly trading at abnormally high and historically unsustainable valuation levels. For these reasons, I think companies such as IonQ, Rigetti, D-Wave, and Quantum Computing have entered bubble territory.

With that said, many big tech companies in the "Magnificent Seven" are exploring quantum applications as well. Many of these companies trade for much more reasonable valuations. While I am not convinced the broader quantum computing opportunity is necessarily in a bubble, I believe investors need to be cautious and thoughtful when selecting which quantum computing stocks to invest in.

And the best choices will rarely be high-flying specialists with big dreams and small revenue streams.

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

Before you buy stock in IonQ, consider this:

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Key Points

• Nvidia stock is surging following news that it can resume chip sales to China.

• Microsoft can benefit tremendously from artificial intelligence (AI) integration across its products.

• 10 stocks we like better than Nvidia ›

Great businesses pursuing massive growth opportunities will see their share prices continuously hit new highs over the long term. This is why investors shouldn't be afraid to buy quality growth stocks at a new high. What matters is understanding the momentum in the business itself, and how long that growth can last.

Some analysts have questioned whether the best days of the "Magnificent Seven" are over, yet Nvidia (NASDAQ: NVDA) and Microsoft (NASDAQ: MSFT) continue to hit new highs following strong earnings results this year. Here's why these high-flying tech stocks are still solid buys for at least the next five years.

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1. Nvidia

Shares of Nvidia are sitting close to new highs after the company just received welcome news. Following a meeting between CEO Jensen Huang and President Donald Trump, the U.S. government will allow Nvidia to resume sales of its H20 chip in China, unlocking billions in quarterly revenue.

That said, Nvidia would have been just fine without revenue from China. Even including the China restrictions, analysts were expecting Nvidia to report $200 billion in revenue this year, for an increase of 53% over fiscal 2025 (ending in January). But resuming sales of the H20 should cause analysts to raise their near-term revenue and earnings estimates, likely sending the stock higher.

The H20 is basically a watered-down version of the company's more capable H200 data center chip. Sales to China totaled $17 billion last year, or 13% of Nvidia's revenue. The H20 generated $4.6 billion in revenue in fiscal Q1 before it had to cancel shipments due to new licensing requirements for sales to China. The $2.5 billion of revenue that Nvidia left on the table in fiscal Q1 will likely be realized in fiscal Q3, adding more upside to analysts' current $45 billion revenue estimate for fiscal Q2.

Nvidia's China business could grow significantly as a percentage of its total revenue over the next year. During the last earnings call with analysts, Nvidia CFO Colette Kress said the company had planned for $8 billion of H20 orders in fiscal Q2 before the restrictions took effect.

This just adds more fuel to the fire for Nvidia's near-term momentum. Strong demand for its Blackwell chip should benefit Nvidia's margins and earnings in the second half of the year. Current analyst estimates call for quarterly adjusted non-GAAP (generally accepted accounting principles) earnings growth to accelerate to 47% year over year in fiscal Q2, before growing 44% in fiscal Q3, and 50% in fiscal Q4. However, these estimates likely exclude additional H20 sales, since this news just broke in the last week.

While there is a lot of noise around competition with custom chipmakers, Nvidia can grow at high rates for several years. The investment in artificial intelligence (AI) infrastructure is a gigantic opportunity, large enough for multiple suppliers to do well. Nvidia is already preparing to launch the next-generation Vera Rubin chip next year, which should keep its momentum going.

Looking out to fiscal 2030, analysts expect Nvidia's revenue to grow at an annualized rate of 21%, reaching $342 billion. Earnings are expected to grow slightly faster, at 23%. This lines up with Huang's expectation that Nvidia will capture a large portion of the $1 trillion in annual data center spending projected in the next four years.

The stock could climb at similar rates as earnings, which makes Nvidia an excellent growth stock to buy and hold for the long term, even at its current price around $170 a share.

2. Microsoft

Microsoft reported better-than-expected demand for AI services in its enterprise cloud business last quarter. As a leader in productivity software, Microsoft can benefit tremendously over the long term from AI integration across its products. It's for these reasons that the stock has skyrocketed to new highs since its fiscal Q3 earnings report in late April.

Microsoft Azure is the second-leading enterprise cloud provider that continues to gain share of a growing $348 billion market, according to Synergy Research. Azure revenue grew 33% year over year last quarter, but what got investors' attention was that 16 percentage points of Azure's growth was driven by AI services.

It seems every industry is embracing this revolutionary technology and doubling down on it. Microsoft sent a strong signal that the ramp in AI investment is just getting started. CEO Satya Nadella noted that the company is expanding its data center capacity, opening 10 new data centers across 10 countries.

The company's AI-powered assistant, Microsoft Copilot, has attracted hundreds of thousands of corporate customers, up three times year over year in the last quarter. It is winning bigger deals for Copilot in the enterprise market, and existing customers are returning to buy more seats for their employees.

Microsoft is even prepared for the next major advancement in cloud services with its range of software and development tools for quantum computing. The Azure Quantum platform has multiple leaders providing simulators and other tools for customers, including IonQ and Rigetti.

Microsoft's AI investments and leadership in software put it in a great position, which is reflected in analysts' growth estimates. Current estimates call for Microsoft to report $279 billion for fiscal 2025 ending in June, and that is expected to grow at an annualized rate of 13% over the next four years. Earnings should grow marginally faster, at a 15% annualized rate. This is enough growth to double the stock by 2029.

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

Before you buy stock in Nvidia, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

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John Ballard has positions in Nvidia. The Motley Fool has positions in and recommends Microsoft and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

Key Points

• Rigetti Computing is a pure-play quantum computing investment.

• Investors must understand the risks associated with investing in Rigetti.

• A massive quantum computing market is expected to emerge by 2030.

• 10 stocks we like better than Rigetti Computing ›

Quantum computing is an intriguing investment field. Right now, there's a ton of money pouring into the technology, but it really isn't adding any value back into the economy. That's because it's still a fledgling technology that's working its way toward commercial viability. However, once it reaches that point, the companies involved in this space could see their stocks skyrocket alongside demand.

Rigetti Computing (NASDAQ: RGTI) is a company in the quantum computing race, and it's a popular pick among investors. However, is now the right time to invest $1,000 into the stock?

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Rigetti Computing is a high-risk, high-reward investment

Rigetti Computing is a pure play within the quantum computing investment realm, which means it's quantum computing relevancy or bust. This has several benefits and drawbacks.

On the positive side, the company is laser-focused on quantum computing and is devoting every bit of its resources to investing in the technology and bringing it to market. Additionally, if Rigetti Computing succeeds in its goal to achieve quantum computing relevancy, its stock is primed to soar because it has no revenue to speak of right now (besides some that it gets from research contracts). Rigetti Computing is only a $4 billion business, so it has immense upside if it can achieve significant growth.

The downside of investing in quantum computing pure plays is that there is no backup plan. If another competitor and its technology surpass Rigetti's, the stock becomes obsolete, and every share is worthless, ultimately sending the stock to $0. That's a grim outlook, but it's entirely within the realm of possibility.

Furthermore, because its only cash sources are various contracts, issuing new shares, or taking on debt, it doesn't have the financial backing that some of the large tech companies competing in quantum computing have. For example, one large competitor in this space is Alphabet, the parent company of Google. Over the past 12 months, Alphabet produced a jaw-dropping $75 billion in free cash flow. It means nothing for Alphabet to sink $1 billion into the quantum computing race -- a sum of money that Rigetti can only dream of.

Investing in Rigetti Computing is a high-risk endeavor, but if it pays off, shareholders could reap substantial rewards.

2030 is a key milestone in quantum computing

To invest in a stock as risky as Rigetti Computing, investors need to be assured that there's an adequate payoff should it win the quantum computing race. Quantum computing has applications in many fields, such as weather forecasting, logistics networks, and artificial intelligence (AI). Numerous other problems can likely be solved by quantum computing which haven't been explored yet.

However, it will be a few years before quantum computing becomes widespread.

Rigetti Computing estimates that before 2030, the annual value for quantum computing providers will be around $1 billion to $2 billion. However, it expects that opportunity to expand to $15 billion to $30 billion per year between 2030 and 2040. Should Rigetti capture 20% of that market, that's $3 billion in annual revenue. Since the stock is valued at around $4 billion, there's certainly plenty of room for upside.

So, should you invest $1,000 in Rigetti Computing? I'd say it depends on your portfolio size. If you have $2,000 to invest, then investing $1,000 into Rigetti Computing is a bad idea. If your portfolio is $100,000 or greater, then this may not be a bad idea if you're a firm believer that Rigetti Computing will win the quantum computing race. There's a ton of risk here, so it may be wiser to spread bets out among multiple quantum computing companies.

By keeping your position sizing small, you limit the effect if the stock price reaches zero. But if a 1% position increases 10-fold in value, your portfolio reaps the reward of an incredible investment.

Rigetti Computing is a high-risk, high-reward investment, and people need to understand this before investing any money in the stock.

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rigetti Computing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.

Rigetti Computing (NASDAQ: RGTI) stockholders should consider this information before deciding whether to buy or sell the stock.

*Stock prices used were the afternoon prices of July 9, 2025. The video was published on July 11, 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rigetti Computing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

The quantum computing company is making significant progress on its goals to develop this innovative technology.

*Stock prices used were the afternoon prices of July 10, 2025. The video was published on July 12, 2025.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rigetti Computing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $671,477!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,010,880!*

Now, it’s worth noting Stock Advisor’s total average return is 1,047% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 7, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Rigetti Computing (NASDAQ: RGTI) is on the verge of changing the world with quantum computing, but is it a speculative gamble or the next tech breakthrough? Learn why Rigetti is at the cutting edge of technology, what the financial risks are, and why this stock could potentially 10x in the next few years.

*Stock prices used were the market prices of June 18, 2025. The video was published on June 19, 2025.

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Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 995%* — a market-crushing outperformance compared to 172% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

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*Stock Advisor returns as of June 9, 2025

Rick Orford has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Rick Orford is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.

Rigetti Computing (NASDAQ: RGTI), a quantum computing company that makes hardware, software, and cloud systems for the technology, has seen its share price surge more than 1,000% over the past year. Whenever a company's stock goes like absolute gangbusters, it's worth taking a closer look and asking, "What makes this company so special?"

Sometimes, the answer is that it's not special. Perhaps investors are just following the pack or betting on a meme stock. Other times, they may be right and have seen something others didn't notice earlier. In either case, share price gains of that magnitude warrant a closer observation of the company.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Is Rigetti special and worth buying, or are investors getting caught up in the hype? Let's take a look.

Pros: Quantum computing could be significant

Artificial intelligence (AI) receives most of the attention among tech investors, but quantum computing will likely be a transformational technology across many industries, including drug discovery, materials science, climate modeling, and financial forecasting, among others.

The key aspect of quantum computers versus traditional computers is that the former can process data as either zeros or 1s, or both at the same time, which allows them to make many more calculations simultaneously.

This technology could create up to $850 billion in economic value by 2040, according to the Boston Consulting Group. Hardware and software from quantum computing, like what Rigetti produces, could be worth up to $170 billion by that time.

Some investors have latched on to this opportunity with Rigetti's stock. They may have noticed that the company has large tech customers, including Amazon and Microsoft, as well as contracts with the U.S. government, and believe they're getting a glimpse into quantum computing's potential.

Cons: Quantum computing is unproven, and Rigetti's sales are falling

Despite the upside of this technology, Rigetti faces some significant headwinds. First, the quantum computing market is still unproven. Even other companies that have their own quantum computers, like Alphabet, believe that real-world applications are years away.

That's not great news for Rigetti, and neither is the fact that the company's sales are falling. It generated only $1.5 million in revenue in its first quarter, a 52% decline from the year-ago quarter. Management has said that significant commercial sales are still three to five years away.

Meanwhile, the company is burning through a significant amount of cash, with an operating loss of about $22 million in the first quarter.

Verdict: Avoid this stock for now

To recap, Rigetti is betting on an unproven market, its sales are falling and won't be meaningful for years, and its operating losses are significant.

I think it's far too early to invest in it, especially since the company doesn't expect significant revenue for many more years. And the quantum computing market is fairly speculative right now, with companies and investors hoping for breakthroughs that are years away, if they come at all.

Even if you're optimistic about the company's potential, Rigetti's share price looks far too expensive, with a price-to-sales ratio of 272, extremely costly by any standard.

While Rigetti has the potential to benefit from quantum computing years from now, betting on this expensive stock right now is far more of a speculative move than a long-term investment strategy.

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rigetti Computing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $875,479!*

Now, it’s worth noting Stock Advisor’s total average return is 998% — a market-crushing outperformance compared to 174% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

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Quantum computing stocks are still quite hot in the market, although their week-to-week performance can be incredibly volatile. For example, one of the more popular quantum computing plays, Rigetti Computing (NASDAQ: RGTI), set a new all-time high right at the end of 2024, but plunged 70% just a few weeks into 2025. Now, it's only off around 40% from its all-time high. One of its peers, IonQ (NYSE: IONQ), has also seen extreme volatility, although not quite the same level as Rigetti.

Of these two, is one a more attractive stock to buy? Although quantum computing is still a few years away from being widely used commercially, any quantum company could have a breakthrough at a moment's notice, and send shares soaring. That alone is enough to get some investors excited about the stocks, but I think there's one pick that might prevail in this analysis.

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Both companies have taken steps to ensure they have adequate cash on hand

Both IonQ and Rigetti are quantum computing start-ups that rely on external funding to continue their operations. Both companies have issued more shares, taken on debt, and received contracts for their work. Basically, any funding source that's outside of actual profitability. Until these companies can prove quantum computing's relevance to everyday problems, they will be in this external funding state, which makes examining cash piles and resource burn critical.

Free cash flow (FCF) is an excellent measure of understanding how much cash is burning each quarter, as it utilizes operating cash flow and subtracts capital expenditures from that figure as well. For unprofitable companies like IonQ and Rigetti Computing, this allows investors to understand how long their current cash pile would last if operations continued in their present state.

IONQ Free Cash Flow (Quarterly) data by YCharts

IonQ has around 16 quarters of cash left, and Rigetti has about 13 quarters left. However, Rigetti Computing is also undergoing a capital raise, as it is issuing enough stock to generate $350 million in additional funds for the company. This will ensure the company's finances and allow it to invest more aggressively in its quantum computing capabilities.

Both companies believe that 2030 will be a turning point for quantum computing. IonQ believes it will be profitable by then, and Rigetti points out that the quantum computing market will dramatically expand in the decade following 2030.

That's still five years away, so is there a clear leader in the quantum computing arms race between the two?

Predicting the future of quantum computing is nearly impossible

Both companies offer full-stack quantum computing solutions, offering everything a potential client would need to run a quantum computer. This includes the hardware and software necessary to run quantum computing workloads. As a result, they are direct competitors with each other. However, these two are also competing against some of the biggest tech behemoths in the world, including Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Both Alphabet and Microsoft can afford to invest billions of dollars into quantum computing if they want, and easily outspend or acquire a company like IonQ or Rigetti Computing.

This makes them formidable competitors, and they are ones to keep an eye on as well.

As for IonQ versus Rigetti Computing, it's incredibly difficult to assess whether one is beating the other in the quantum computing arms race. The best way to look at it is which company has the best 2-qubit gate fidelity, which measures how accurate a quantum computer is. IonQ has achieved 99.9% fidelity, while Rigetti Computing is at 99.5%. While that's fractions of a percent better, the amount of work necessary to go from 99.5% to 99.9% is large.

As a result, I think IonQ is likely a better pick than Rigetti. However, both companies are approaching the quantum computing arms race differently, with Rigetti Computing utilizing superconducting technology while IonQ uses trapped ions. There could be a fundamental flaw in either one of these approaches that nobody has discovered, causing every company that's taken that path to immediately fall behind in the quantum computing arms race.

As a result, I think you're better off owning a basket of quantum computing stocks than just picking one or two winners. Over the long term, owning Rigetti, IonQ, Alphabet, and Microsoft will provide better results than throwing a dart and picking a random quantum computing company. We're still far from determining a winner, and there's no guarantee that any of the companies mentioned above will win the race. It could be countless other companies that are also trying to develop a quantum computing solution. Because of that, investors should spread their risk out among multiple picks, as companies like IonQ or Rigetti Computing will likely be worthless if they lose the quantum computing race to someone else.

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

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It's been a hard year for investors so far. As of market close on June 5, the S&P 500 and Nasdaq Composite indexes each have breakeven returns on the year. While this makes it incredibly difficult to make money in the stock market, there have been some pockets during which investors made out well if they chose to engage with higher-than-usual volatility.

By now, you may have come across a new acronym floating around financial circles called the "TACO" trade. Below, I'll detail what this means and why it's important.

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From there, I'll dig into one of the new, hot areas fueling the artificial intelligence (AI) narrative: quantum computing.

Could quantum computing stocks be a good way to play the TACO trade? Read on to find out.

What is the TACO trade?

Even though the S&P 500 and Nasdaq are both flat on the year, the image below illustrates that there have been some pronounced dips and sharp rises across both indexes throughout 2025. The catch is that these volatile movements have been incredibly fleeting.

^SPX data by YCharts

The term "TACO trade" is a cheeky acronym that stands for "Trump always chickens out." Basically, whenever the President voiced some tough rhetoric on his new tariff policies, the markets plummeted. However, when he subsequently eases some of the pressure on the tariff talking points, the markets roar again.

In summary, the TACO trade is simply a new version of buying the dip when stock prices become abnormally depressed.

Are quantum computing stocks a good buy right now?

Two of the most popular quantum computing stocks in the market right now are IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI). During 2024, shares of IonQ soared by 237% while Rigetti stock climbed by a jaw-dropping 1,450% -- both of which completely dominated the broader market.

This year has been a different story, though. As of closing bell on June 5, shares of IonQ and Rigetti Computing have plummeted by 12% and 28%, respectively.

Given these declines, is now a good opportunity to buy quantum computing stocks?

To answer that question, smart investors understand that valuation needs to be a consideration. Per the chart below, Rigetti Computing and IonQ boast price-to-sales (P/S) ratios that seem incongruent with the company's underlying fundamentals.

RGTI PS Ratio data by YCharts

Looked at another way, IonQ and Rigetti Computing have generated a combined revenue of roughly $50 million over the last 12 months -- all while posting a net loss of $460 million between the two businesses.

Given the nominal sales figures and hemorrhaging losses, it's hard to justify the valuation multiples pictured above.

While Rigetti and IonQ have each been on a monster run from a share price perspective, both of these companies appear to be riding high on a bullish quantum computing narrative. In other words, their trading levels are not rooted in the actual performance of the business but rather in a broader macro viewpoint that quantum computing could be a good opportunity in the long run.

Keep the big picture in focus

The big takeaway here is that even though shares of IonQ and Rigetti are down on the year, their respective valuations make it clear that neither of these companies is a good "buy the dip" candidate. Rather, even with their underperformance throughout the year, each stock remains overvalued.

For these reasons, I would not chase any sell-offs in these quantum computing stocks as the TACO trade continues to evolve. My suspicion is that both IonQ and Rigetti will experience some continued valuation compression, and their share prices could very well keep spiraling downward.

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

Before you buy stock in IonQ, consider this:

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Not for the first time in their relatively brief existences, quantum computing stocks shot well higher in value on Thursday. That wasn't due to any fresh innovation, discovery, or major business move. Rather, it seemed to have more to do with some grand pronouncements by a single quantum company executive.

Nevertheless, as a writer, I can confirm that words have power, and these were powerful enough to lift the sector as a whole. Industry standard-bearers Quantum Computing (NASDAQ: QUBT), Rigetti Computing (NASDAQ: RGTI), and D-Wave Quantum (NYSE: QBTS) all saw their share prices inflate at double-digit rates. The stocks rose a respective 15%, 24%, and 26% on the day.

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The king of quantum?

Those market-moving words came from the leader of one of their peers, IonQ (NYSE: IONQ). That morning, Barron's published an interview with the company's CEO, Niccolo de Masi, in which he waxed extremely bullish about the prospects for his business. This was clearly taken by the article's readers as likely prosperity for the wider quantum space.

De Masi is clearly not the shy and publicity-adverse type of corporate leader, as he made a series of grand pronouncements about IonQ.

In his eyes, the company is the quantum sector equivalent of graphics processing unit (GPU) king Nvidia or advanced processor specialist Broadcom. As such, IonQ's ultimate prominence and power will be imitated by businesses hoping to catch some of its magic.

In fact, added the executive, "they have always copied and followed us."

That isn't really accurate, as the varied quantum companies currently traded on the stock market are following different paths to hoped-for success. In IonQ's case, it's a "full-stack" business, aiming to provide hardware, the software that runs on it, and applications for control and access.

In a way, though, Quantum Computing, Rigetti, and D-Wave are followers. IonQ was among the first pure-play quantum companies to become publicly traded. That pedigree is a factor that has helped drive its market cap to over $11 billion at present. That dwarfs its three peers, as the most richly capitalized of the trio -- D-Wave -- is currently valued by investors at under $5.6 billion.

Rivers of red ink

Nevertheless, investors should always be wary of hype, especially when applied to an early-stage industry struggling to get on its financial feet -- like quantum.

While the technology has indisputably immense potential, getting a quantum business to the point where it's efficient and profitable is quite the challenge. None of the prominent quantum companies -- yes, including IonQ -- has yet to stem their often very deep net losses.

There are potentially significant catalysts on the horizon. One that could change the landscape dramatically is Congress's National Quantum Initiative Reauthorization Act.

As the name implies, this would restart a federal program aimed at boosting quantum, with public funding for businesses actively involved in such work. Capital for cash-hungry companies on the cutting-edge of new technologies is almost always scarce; passing the act into law would alleviate that nagging and persistent headache.

I have to emphasize here that such industry-boosting factors are only potential at this point, not reality. And that goes double for any talk of a single quantum company or a clutch of them becoming the new Nvidia or Broadcom.

Both of these successful enterprises are the products of years of patient business development and often heavy research and development expenditure. Neither blasted into the world suddenly as cash-gushing winners.

Spread the wealth

At this point, it's hard to place bets on which quantum company, or companies, will pull ahead with offerings irresistible to customers thirsty for exponential increases in computing power.

Given that, it's probably a good move for quantum bulls to spread out their investments among the leading stocks in the space. I feel all of the aforementioned titles can potentially leverage the technology into robust profits eventually -- and yes, that includes IonQ, all hype and hot air aside.

Should you invest $1,000 in Quantum Computing right now?

Before you buy stock in Quantum Computing, consider this:

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Quantum computing is getting a lot of attention from investors right now as some look for the next big thing in the tech space. The result has been some high-flying quantum computing stocks, with Rigetti Computing (NASDAQ: RGTI) rising 823% over the past year.

But Rigetti's stock is taking a breather right now and is down 23% since the beginning of the year. That pullback may make buying Rigetti stock an alluring idea to some investors.

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Here are three reasons why you should resist the temptation.

1. Quantum computing is still a mostly unproven market

Rigetti makes quantum computing hardware, software, and quantum computing cloud systems that it sells to customers, and some of them are big tech players like Microsoft and Amazon. The company is tapping into a quantum computing hardware and software market that could be worth up to $170 billion by 2040, according to Boston Consulting Group.

But while Rigetti's customers and sales are more than theoretical, the mass adoption of quantum computing is still speculative. There aren't many practical applications for quantum computing at the moment, and most companies are still trying to figure out how to reduce the amount of errors their systems produce.

Does quantum computing hold lots of promise to surpass existing computing capabilities? Absolutely. But is Rigetti or any of its peers on the cusp of truly revolutionizing how companies and consumers process information? Most likely not. This makes any investment in the company right now a fairly speculative move.

2. Rigetti's sales are slipping

One thing that start-ups in a new market should be able to do is increase sales. But Rigetti's revenue has been on a downward trajectory. The company has sales of just $1.5 million in its recently reported first quarter, down nearly 52% from the year-ago quarter.

This wasn't just one bad quarter of sales, either. The company's full-year 2024 revenue was $10.8 million, down 10% from the previous year.

Rigetti's management said on the first-quarter earnings call that significant commercial sales won't occur until about three to five years from now. Meanwhile, the company's operating loss widened to nearly $22 million in the quarter.

It's worth noting, though, that the company has $237.7 million in cash and cash equivalents. So it's likely Rigetti has enough money to continue its operations for a while. But it also means that if you buy shares of Rigetti now, you shouldn't expect significant revenue from the company for a long time.

3. Rigetti's stock is shockingly expensive

Rigetti's shares have a price-to-sales multiple of 197, which is very expensive by any measure. Investors have gotten ahead of themselves in their optimism over this stock and driven its share price up over 800% over the past year. I'll reiterate here that Rigetti had just $1.5 million in sales in the most recent quarter, and those sales are declining.

Buying this stock now, after its massive share price gains and high price-to-sales ratio, looks like an unwise move. Instead of buying Rigetti now, a much better option may be to wait and see if the company is able to significantly increase its sales and narrow its losses over the next few years.

Betting your money in a speculative market on a company with unproven results that's already experienced unwarranted share price gains seems much more like gambling than investing.

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

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In the first quarter, hedge fund billionaire Israel Englander of Millennium Management sold 1.2 million shares of Rigetti Computing (NASDAQ: RGTI), reducing his stake in the quantum computing stock by 80%. The sale represented a sharp turnaround from the prior quarter, when Englander purchased 1.4 million shares.

His decision to sell stands out because all six analysts who follow Rigetti have a "buy" rating on the stock. The target prices range from $14 per share to $16 per share, implying upside of 21% to 39% from the current share price of $11.50. Put differently, not one analyst thinks the stock is overvalued at its current price.

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Does Israel Englander know something Wall Street doesn't?

Quantum computers will not replace classical computers for most tasks

Classical computers manipulate binary digits (bits) to perform calculations and run operations, but quantum computers manipulate quantum bits (qubits), which can store exponentially more information. That's because bits can only be ones and zeroes, but qubits can be weighed combinations of ones and zeroes.

That a qubit can simultaneously exist as one and zero is called superposition, and that quality lets quantum computers quickly solve certain problems that would take classical computers years. Quantum computers are particularly well-suited to situations with lots of variables interacting in complex ways, such as simulation and optimization problems.

For instance, a quantum computer would be especially helpful in simulating molecules to accelerate drug discovery and material design. It would also be helpful in optimizing supply chains and logistics routes. But quantum computing will never replace all classical computing. "For most kinds of tasks and challenges, traditional computers are expected to remain the best solution," IBM said on its website.

Rigetti reported disappointing financial results in the first quarter

Rigetti builds and operates quantum computing systems. The company designed the first multichip quantum processor, and it offers cloud-based quantum computing services. Management says its full-stack approach spanning hardware and software "offers both the fastest and lowest risk path to building commercially valuable quantum computers."

Rigetti reported disappointing first-quarter financial results that missed estimates on the top and bottom lines. Revenue plunged 51% to $1.5 million, and non-GAAP (generally accepted accounting principles) net income was -$0.08 per diluted share. The company also reported net cash used in operations of -$13.6 million. And Wall Street expects Rigetti to continue losing money through at least 2028.

Rigetti Computing stock is incredibly expensive

So, returning to the original question: Does billionaire Israel Englander know something Wall Street doesn't? Not necessarily. He bought shares when Rigetti caught fire in the fourth quarter. But when the stock rocketed to $20 per share early in the first quarter -- representing a 90-day gain of 2,500% -- Englander may have simply decided to take profits.

Meanwhile, the six Wall Street analysts who follow Rigetti, all of whom have a "buy" rating on the stock, are probably counting on investors' willingness to pay a very high valuation multiple to own a prominent stock in the trendy quantum computing industry. But I think investors have gotten way ahead of themselves with Rigetti.

The quantum computing market is projected to grow at 20% annually through 2030, but spending will total just $4.2 billion at that point, according to Grand View Research. Comparatively, the cloud computing market is also expected to grow at 20% annually over the same period, but spending will total $2.4 trillion. Put differently, the cloud computing market will still be about 570 times bigger than the quantum computing market by the end of the decade.

Quantum computing will undoubtedly be an important technology in the future, but that future is still many years away, and Rigetti currently trades at 290 times sales. To put that in context, cloud computing company Cloudflare trades at 30 times sales, which itself is very pricey. But Rigetti is nine times more expensive. Investors should avoid the stock for now.

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

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Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

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Trevor Jennewine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare and International Business Machines. The Motley Fool has a disclosure policy.

Shares of Rigetti Computing (NASDAQ: RGTI) are skyrocketing on Thursday. The quantum computing start-up's stock surged 10.5% as of 2:50 p.m. ET and was up as much as 12.3% earlier in the day. The rise comes as the S&P 500 gained 1.3% and the Nasdaq Composite rose 1.8%.

The quantum computing company is rallying after its industry peer reported positive earnings Thursday. The stock is also seeing a boost from President Donald Trump's U.K. trade deal.

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D-Wave's record quarter lifts all quantum boats

D-Wave Quantum reported strong quarterly results, beating expectations. The company announced revenue of $15 million for its first quarter of 2025, a 509% increase from the $2.5 million reported in the same period last year.

D-Wave's CEO, Alan Baratz, called it "arguably the most significant [quarter] in D-Wave's history," highlighting that the company had demonstrated "quantum supremacy" over classical computing on a useful real-world problem -- a significant milestone for the industry at large.

Trump trade deal boosts optimism

Adding to the positive momentum, Trump unveiled the outline of a trade deal with the United Kingdom on Thursday. While much of it focused on traditional industries like agriculture, the deal includes provisions related to intellectual property protection that could benefit Rigetti and other quantum stocks.

There's a long way to go

Despite the positive news from D-Wave and its demonstration of "quantum supremacy," it was extremely limited in its scope. It will be a long time before quantum technology matures to the point where it delivers major economic benefits.

If you are an investor with a particularly high risk tolerance and the ability to possibly wait a decade or more for your investment to pay off, Rigetti is one of the better quantum stocks on the market. However, I would strongly suggest spreading your investment around many quantum stocks, as there is no way to tell at this point which company's approach will work in the long run.

Should you invest $1,000 in Rigetti Computing right now?

Before you buy stock in Rigetti Computing, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Rigetti Computing wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

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Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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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Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.

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.

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.

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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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Goldman Sachs Group, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

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:

Company	ETF Weight
D-wave Quantum	3.31%
Orange	2.37%
NEC Corp	2.17%
Palantir Technologies	2.15%
Koninklijke Kpn	2.05%
Alibaba Group	2.03%
Nokia	1.93%
Northrop Grumman	1.89%
Rigetti Computing	1.87%
RTX Corp	1.83%

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?

Before you buy stock in ETF Series Solutions - Defiance Quantum ETF, consider this:

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies. The Motley Fool recommends Alibaba Group and RTX. The Motley Fool has a disclosure policy.

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.