Better Artificial Intelligence Stock: IonQ vs. Rigetti Computing

Quantum Computing Market Overview - Quantum computers process binary bits simultaneously, enabling faster data processing compared to traditional computers, but they are larger, more expensive, and have higher error rates [2] - Quantum computing companies aim to miniaturize chips, reduce error rates, and lower manufacturing costs, making them more suitable for AI applications [3] - The quantum computing market is expected to grow at a CAGR of 34.8% from 2024 to 2032, driven by advancements in chip miniaturization and error detection [15] IonQ Overview - IonQ offers three quantum computing systems: Aria, Forte, and Forte Enterprise, and provides cloud-based quantum computing services primarily to government and university customers [5] - The company is developing "trapped ion" technology to shrink quantum processing units (QPUs) from feet to inches, potentially enabling cheaper and more powerful systems [6] - Despite the departure of co-founder Chris Monroe, IonQ has continued to grow by installing more systems, securing government contracts, and forming AI partnerships [7] - IonQ generated $22 million in revenue in 2023, missing its$34 million target, but analysts expect its revenue to grow at a CAGR of 89% to $148 million by 2026 [11][12] - IonQ's enterprise value is$8.8 billion, trading at 59 times its estimated 2026 sales, with a 10% increase in share count since its SPAC merger [13][14] Rigetti Computing Overview - Rigetti designs and manufactures its own QPUs and offers a cloud platform for developers to write quantum algorithms, positioning itself as a "full stack" quantum computing company [8] - The company aims to develop cheaper and more scalable QPUs for commercial customers, despite the abrupt departure of founder Chad Rigetti in December 2022 [9] - Rigetti launched the Novera QPU, a 9-qubit system priced at $900,000, and deployed its 84-qubit Ankaa-3 system with a 99$12 million in revenue in 2023, missing its $34 million target, but analysts project a CAGR of 43$35 million by 2026 [11][12] - Rigetti's enterprise value is $4.3 billion, trading at 123 times its projected 2026 sales, with a 69% increase in share count since its SPAC merger [13][14] Comparison and Investment Outlook - Both IonQ and Rigetti went public via SPAC mergers and missed their initial revenue targets, but their stocks reached all-time highs in December 2024 due to recent progress [11][12] - IonQ is considered a better investment due to its superior scale, higher growth rates, milder share dilution, and lower valuation compared to Rigetti [15]