The quantum computing industry has emerged as one of the hottest investment themes of 2024, with leading players seeing their stocks surge amid growing commercial and government interest. Industry research firm Fortune Business Insights predicts the global quantum computing market will grow from $1.16 billion in 2024 to $12.6 billion in 2032, a CAGR of 34.8%.

Two well-known, pure-play quantum computing companies, IonQ (IONQ -3.71%) And Rigetti Computing (RGTI 45.19%)offer investors different approaches to this revolutionary technology. Although both stocks have posted impressive gains in 2024, their business models, technological approaches and current market positions have significant differences. Here’s how these quantum computing competitors stack up for investors.

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Sales dynamics and volume

IonQ has shown stronger commercial traction, posting revenue of $12.4 million in the third quarter of 2024, representing 102% year-over-year growth. The company secured $63.5 million in new contracts, including a groundbreaking $54.5 million contract with the US Air Force Research Lab to develop networked quantum systems.

Rigetti reported a more modest revenue of $2.4 million for the third quarter of 2024. However, the company has strong research partnerships, including a prominent position at the UK’s National Quantum Computing Centre, where its 24-qubit system supports advanced quantum research and development.

Technological approaches

IonQ uses trapped ion quantum computing technology, which provides high stability and connectivity between qubits. The company’s systems have demonstrated strong performance metrics and reliability in cloud-based quantum computing services.

Rigetti focuses on superconducting qubit technology, achieving gate speeds 10,000 times faster than trapped ion systems. The company manufactures its chips internally at Fab-1, the industry’s first dedicated quantum device manufacturing facility, allowing greater control over technology development.

Strategic partnerships and development

IonQ announced several strategic moves in the third quarter of 2024, including plans to acquire quantum networking company Qubitekk. The company also entered into partnerships with AstraZeneca for applications in drug development and Ansys Integrating quantum computers into the $10 billion computer-aided technology industry.

Rigetti has focused on advancing its core technology and plans to introduce a new modular system architecture in 2025. The company expects to achieve 99.5% two-qubit average accuracy in its upcoming 36-qubit system, followed by a system with more than 100 qubits per year – late 2025, demonstrating its focus on scalable quantum processing units.

Financial position and valuation

IonQ has a stronger liquidity position with $382.8 million in cash and investments as of September 30, 2024. However, the company’s third-quarter net loss was $52.5 million, reflecting continued high investments in research and development. With a market cap of $8.2 billion, IonQ trades at an incredible 212.6 times last year’s sales.

Rigetti reported $92.6 million in cash and investments at the end of the quarter, with a narrower third-quarter net loss of $14.8 million. While its $1.22 billion market cap appears more modest, the company still trades at 60 times sales, underscoring its premium valuations in the quantum computing sector.

Which quantum computing stock is the better buy?

Both companies have attracted significant institutional investment in 2024, including firms like Vanguard and BlackRock increase their positions in every quantum computing stock in the second half of the year. IonQ offers stronger commercial momentum and a more robust balance sheet, while Rigetti’s manufacturing capabilities and technology roadmap provide unique competitive advantages.

For investors looking to gain exposure to quantum computing, IonQ’s revenue growth and government contracts provide shorter-term visibility despite its higher valuation. Rigetti, on the other hand, offers a more speculative opportunity focused on advancing superconductivity technology.

However, since both stocks trade at high premiums and quantum computing is still in its early stages, investors should size their positions accordingly within a diversified portfolio.