Quantum computing stocks delivered explosive gains until the start of the year. Investors invested in them as the AI rally pushed most tech-related stocks to record highs, and quantum computing was seen as the next big beneficiary of AI. Quantum computing chips could allow for a much more rapid scaling up in performance, but the technology is likely over a decade away.
It’s so early that there’s no agreed-upon pathway to how quantum computing could be commercially viable. Almost every quantum computing startup is researching its own independent method.
In that sense, I see quantum computing stocks as similar to those in the biotech industry. You’re making very speculative bets, and many of these companies will likely go bust before they make a dime in profit.
However, that doesn’t mean you should stay away. If you think that the AI rally is going to restart and recover from the current pessimism, this article is for you. The following three quantum computing stocks could deliver triple-digit gains from their current price:
24/7 Wall St. Key Points:
- These quantum computing stocks could bounce back if the artificial intelligence rally returns.
- That said, these are highly dilutive stocks with shaky underlying fundamentals, so a long-term position may not be worth it.
- Still, the dip could be worth buying for a short-term bounce-back. Also, don’t forget to grab our free “The Next NVIDIA” report. It includes a software stock with 10X potential.
IonQ (IONQ)
IonQ (NYSE:IONQ) is a quantum computing company that specializes in trapped-ion quantum computers. These computers use ionized atoms for calculations and they have fewer errors compared to other quantum computing techs. It has offerings that are integrated with AWS, Azure, and Google Cloud.
The company has had significant growth and is seen as the top standalone quantum computing companies. But again, it shares the hallmarks of most other quantum computing startups in being deeply unprofitable.
2024 revenue rose by 95% year-over-year to $43.1 million, and it has a major contract worth $1 billion with the University of Maryland. Still, it posted $171.55 million in losses. The company holds $366 million in cash against no debt, so IonQ has about two years of cash runway. Beyond that, it may have to turn to further dilution, though management could also take advantage of the current spike and dilute more.
Is the dip worth buying here? That’s tough to say since IONQ stock will likely move along with most other quantum computing stocks. But if you’re betting big on the quantum industry, this company should be on your list.
Quantum Computing Inc (QUBT)
Quantum Computing Inc (NASDAQ:QUBT) makes portable quantum computers that have low power and can be operated at room temperature. It also has quantum random number generators and quantum authentication for the cybersecurity industry.
This could be a good bet if you think personal quantum computing is going to take off soon or if the cybersecurity industry will move to rapidly integrate quantum computing. It is a smaller company with a market cap of $700 million as of writing, but this company had a valuation of around a tenth of that before the recent spike.
Quantum Computing Inc is still pre-revenue and has posted $24 million in TTM losses. In comparison, it has 3 million in cash and $8 million in debt. The dilution will likely pick back up if the company doesn’t take on more debt or find other avenues to raise cash. Outstanding shares have increased from 29.2 million in mid-2022 to over 94.4 million in Q3 2024.
There is only one analyst currently covering the stock. He has a buy rating with a price target of $8.5. The stock could recover to that price target if the AI hype rally continues. Regardless, this is a speculative bet in both the short term and the long term.
Rigetti Computing (RGTI)
Rigetti Computing (NASDAQ:RGTI) makes quantum computers and superconducting quantum processors. It has a Quantum Cloud Services platform for cloud and software development. The company has a 9-qubit chip and the Ankaa-2 system. Rigetti plans to release its Ankaa-3 system with 82 qubits and a scalable 32-qubit multi-chip architecture this year.
RGTI stock has spiked 818% in the past six months alone, though it is down about 62% from its peak price. It reported $61 million in TTM losses and just $12 million in revenue. That said, losses have been declining very steadily and are down from $85 million in TTM revenue in Q3 2023.
However, its cash balance has also been on the decline. It had over $207 million in TTM cash in Q1 2022. That has since declined to $93 million in Q3 2024. Debt is at $22 million. The cash balance has held steady so far as the rate of dilution has picked up. Rigetti’s outstanding share count has grown from 132 million in Q2 2023 to almost 192 million in Q3 2024. Considering revenue has been sluggish, and progress has been slow in reducing losses, dilution is unlikely to go away soon.
I would only buy the dip here if you think that quantum computing stocks will bounce back in the short term. A long-term holding probably won’t pay off too well.
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