Is your portfolio ready for the quantum revolution? Quantum computing could reshape everything from finance and drug discovery to materials science and cybersecurity. It’s a field still in its early stages, but breakthroughs will make Moore’s Law look like child’s play. Investors eager to capture its upside will need to understand the landscape. This article tiers the best quantum computing stocks based on their pure play exposure. Our ranking methodology considers business model, revenue concentration, and vertical integration.
Tier 1: Pure-Play Quantum Computing
These companies’ core business models focus on quantum hardware/software development, offering the most direct investment in this space. One key note is that each of the major players in this tier focus on a different type of qubit technology (i.e. how the computer stores and processes information). Investors who want the full upside – and risk – can consider these quantum computing stocks.
Rigetti Computing (RGTI)
Rigetti Computing (RGTI) focuses on superconducting qubits and a hybrid quantum-classical system for potential near-term applications.
Rigetti Computing focuses on hybrid quantum-classical computing. This is a pragmatic approach that could bring tangible use cases much sooner than “pure” quantum computing is available. This makes Rigetti’s systems valuable today for solving specific high-value problems, like optimization. The company already has partnerships with the US and UK governments, cloud providers like AWS, and research institutions like Oak Ridge.
Like some competitors (IBM, Google), Rigetti uses superconducting qubits. These leverage extreme cold to manipulate quantum states. However, what sets Rigetti apart is that it’s a full-stack quantum computing company. They design and make the chips, integrate them into a system, and develop software for programmers to write quantum algorithms. This control over the entire value chain (chips, systems, and software) offers more exposure to the full upside of quantum computing.
IonQ (IONQ)
IonQ (IONQ) is a bet on trapped ion quantum computing, a leading alternative to superconducting qubits.
IonQ is a leader in trapped ion technology for quantum computing. Unlike more common superconducting qubit approaches, trapped ions offer some unique advantages. IonQ’s trapped ion qubits are particularly known for their quality and stability. Their long coherence times (how long a qubit can hold the information) help reduce error rate, making computations more reliable. Another key benefit is that trapped ions can work without the extreme cooling that superconducting qubits need. This could lead to easier commercialization, as users won’t need to also build a massive dilution fridge for the computer.
IonQ is making steady progress, reaching 35 algorithmic qubits (referred to as “#AQ 35”, a measure of quantum processing power) a year ahead of schedule. The company also has partnerships in place with major cloud providers like AWS and Azure. Researchers and businesses will be able to easily access their quantum computers through the cloud. IonQ is led by renowned professors in quantum computing, and has a strong IP portfolio to protect its position.
Quantum Computing Inc. (QUBT)
Quantum Computing Inc. (QUBT) is a bet on photonic qubits, a novel type of quantum computer especially suitable for communications.
Quantum Computing Inc. an innovative player in the quantum optics and nanophotonics technology space. QUBT’s software suite is designed with privacy at its core, using techniques like homomorphic encryption. This allows computations on encrypted data without needing to decrypt it first, keeping sensitive info private at all times. Their flagship software, Qatalyst, is also hardware agnostic, meaning it can work with many types of qubits. This gives QUBT the room to adapt and “hop onto” onto whichever type becomes the leading approach.
That said, the company is also pushing progress on a unique type of light-based “photonic” qubit. Photonic qubits offer a few key advantages over trapped ions or superconducting qubits. First, they can theoretically operate at room temperature, eliminating the need for bulky and expensive cooling systems. Photons (light particles) can also travel through fiber optic cables, which are already widespread. That means they could be more easily adopted for quantum communications by tapping into existing infrastructure. QUBT has partnered with strategic players like NASA and Los Alamos National Lab to bring their science to fruition faster.
Tier 2: Specific Quantum Applications
These companies are commercializing specific quantum technologies beyond general computing. Investors who want exposure to specific applications can consider these quantum computing stocks.
Note: While there are other innovative companies in this space, many are currently private. As the quantum industry matures, more will likely go public, offering additional investment opportunities.
D-Wave Quantum (QBTS)
D-Wave Quantum (QBTS) is a pioneer in quantum annealing systems with near-term commercial use.
D-Wave is one of the world’s first commercial suppliers of quantum computers, but with a slight caveat. Unlike companies pursuing general-purpose quantum computers, D-Wave builds machines for quantum annealing, and some critics don’t consider their machines “true” quantum computers.
Instead, this is a specialized use case of quantum computing, suitable for optimization problems only. As a result, D-Wave’s computers are limited to tasks like logistics, machine learning, and financial modeling. This limits D-Wave’s addressable market relative to the other pure-play developers in tier 1. On the flipside, this practical go-to-market strategy gives them a head start in the market. D-Wave has an impressive IP moat, with over 200 U.S. patents and over 500 worldwide patents.
Arqit Quantum (ARQQ)
Arqit Quantum (ARQQ) aims to prepare the cybersecurity space for quantum-safe encryption.
Arqit Quantum Inc. is a pioneer in quantum-safe encryption, a technology that secures data from being cracked by future quantum computers. Today’s encryption schemes, like RSA, rely on the difficulty of “brute-forcing” certain math equations. But sufficiently advanced quantum computers will be able to crack these schemes in seconds. That means quantum-safe encryption will eventually become critical in finance, government, and telecommunications. This is a huge addressable market for ARQQ.
Arqit’s technology doesn’t require a physical quantum computer or any new infrastructure. It is entirely cloud-software-based, using classic computing technology. This is key, because customers actually have the incentive to start protecting their data right now to protect themselves from “store now, decrypt later” — where attackers hoard encrypted data now and wait until quantum computers are ready to crack it.
Tier 3: Tech Giants with Quantum Programs
These established giants offer more stable investment options with their smaller, but rapidly growing, quantum divisions. Investors who want a more cautious approach can consider these quantum computing stocks.
Alphabet (GOOG)
Alphabet (GOOG) is a pioneer in the field with deep pockets, impressive achievements, and the talent to push the boundaries.
Google is a major force in quantum computing, having been deeply involved in the field for over a decade. They’ve developed superconducting quantum processors like the 54-qubit Sycamore, which was the first to achieve “quantum supremacy” in 2019. The company has also dedicated large research teams to tackle error correction—a major obstacle to scaling quantum systems. They are also actively developing quantum algorithms and open-source tools like Cirq. Google’s advantage is their vast resources, top talent, and partnerships with academia. Google’s AI expertise could be a game-changer when integrated with quantum computing.
IBM (IBM)
IBM (IBM) has a track record of success in research, and is aiming to be at the center of a collaborative quantum ecosystem.
IBM is another major player, with pioneering research in superconducting qubits. They hold multiple hardware milestones, with their current roadmap targeting a 4,000+ qubit system by 2025. Qiskit, their open-source software framework, is also very popular in the quantum community. Through these open-source efforts, and their cloud-based platform, IBM is putting themselves at the center of a collaborative ecosystem. Also, their investment in quantum-safe cryptography adds extra appeal to those concerned about future cybersecurity.
Microsoft (MSFT)
Microsoft (MSFT) is investing in topological qubit development, making it a strong long-term contender.
Unlike many companies using superconducting qubits, Microsoft is exploring topological qubits. These are theorized to be more stable and require fewer resources for error correction. This could lead to a more compact and powerful quantum machine in the future. Topological qubits could be a game-changer, but they’re still highly theoretical. Microsoft also offers Azure Quantum, a cloud platform to access multiple quantum hardware providers, including IonQ and Rigetti’s machines. This flexibility allows developers to try different qubit technologies (superconducting, trapped-ion, etc.) – a potential advantage in the long run as the optimal approach becomes more clear.
Honeywell International Inc. (HON)
Honeywell (HON) (and its spin-off Quantinuum) are pursuing trapped-ion systems, offering an alternative to superconducting qubits.
Honeywell is a major player in quantum computing, specializing in trapped-ion technology. This approach offers high accuracy and flexibility in quantum calculations. Their merger with Cambridge Quantum (forming Quantinuum) gives them a unique edge with both advanced hardware and software. Honeywell focuses on solving real-world problems with quantum computing, partnering with various industries.
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The road to fully functional quantum computers may be long, but the rewards are extraordinary. This is a technology with the power to solve some of humanity’s most complex problems—like personalized medicine, new materials discovery, and more. Choosing the right quantum computing stocks today could position you at the forefront of a new age of scientific and economic progress.
