AI has fueled the tech boom since late 2022, but what’s next? Quantum computing has already had its market moment, yet its true impact may still be unfolding. This groundbreaking technology, leveraging quantum physics to develop computers of astounding capacity and speed, promises to alter the high-tech world in truly fundamental ways, as it takes everything from AI to IoT to new levels.
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In the meantime, the market is grappling with two contradictory themes: the promise of quantum computing and the reality that, for now, it’s simply not ready for prime time. The answer may be simple: have patience and recognize that investing in quantum computing is a long play – though perhaps not the decades that Nvidia CEO Jensen Huang suggested last month.
Nvidia itself is leaning into the hype, hosting a Quantum Day on March 20 to shed light on the field’s evolving landscape. In fact, B. Riley’s 5-star analyst, Craig Ellis, who is rated by TipRanks among the top 2% of Wall Street’s analysts, sees the event as a bullish catalyst for quantum stocks.
“High-profile upcoming events could strongly support a quick commercialization path in our view, flipping early-year adverse sentiment and inviting broader investor interest… NVDA’s inaugural Jensen Huang-hosted 3/20 GTC Quantum Computing Day is just over a month away, to wrap up the huge and very high profile developer event… We suspect event takeaways could incite Huang to significantly pull in prior views for ~20-year quantum commercialization, that being the catalyst for 1/8’s sharp sector pull-back, from which it seems to have stabilized and recovered and subsequently proceeded. If so, that outlook would be much nearer our previously published five-year take and GOOGL’s recent observation,” Ellis opined
With Quantum Day on the horizon, Ellis is placing his bets on two stocks he believes are best positioned to ride the wave: D-Wave (NASDAQ:QBTS) and Rigetti (NASDAQ:RGTI). Let’s take a closer look at why these quantum pioneers are worth watching.
D-Wave Quantum
We’ll start with D-Wave Quantum, the Palo Alto-based company that’s been at the leading edge of quantum computing research and development since 1999. The company bills itself as an ‘end-to-end’ quantum computer company, capable of building and developing hardware and software systems, cloud services, app development tools, and professional support services to back up a complete move to quantum computing for enterprise-scale customers.
D-Wave has also started selling its quantum computers to customers for practical use. Earlier this month, the company announced that Forschungszentrum Jülich (FZJ), and its Jülich Supercomputing Centre (JSC), purchased one of D-Wave’s annealing quantum computing systems. The purchase makes FZJ the world’s first high-performance computing (HPC) center to own such a system, which will be connected to Europe’s only exascale HPC, the JUPITER supercomputer. The new quantum installation will be used to develop breakthroughs in AI and quantum computing optimization applications.
Quantum computing does not come cheap, and D-Wave has worked successfully to raise the capital necessary for continuing its development work. In January, the company announced and completed an at-the-market sale of equity and raised $150 million in gross proceeds from the offering, an important addition to the firm’s cash balance.
Despite a sharp sell-off this year following Jensen Huang’s prediction that quantum computing is still two decades away from commercial viability, QBTS remains a standout performer – surging 247% over the past 12 months.
Analyst Ellis remains bullish on the company’s trajectory, citing a blend of promising product developments and a robust financial position.
“We see a notable mix of positively-biased product, roadmap, and financial T1-month QBTS developments. To start, the completion of a $150M equity offering completed [sic], which, with believed customer systems sale deposits and 4Q24 activity, lifted cash to ~$320M for abundant R&D and go-to-market funding. On products, on-premises Advantage Systems offerings were formally announced. And while we did not speak with the company, it noted increased interest from HPC centers, government labs, and academic institutions, and Forschungszentrum Jülich (FZJ) as the first HPC center to purchase a quantum system. We believe QBTS’s commercially productive annealing-based approach could be very attractive for optimization-based workloads which span many industries,” Ellis opined.
“We expect QBTS to be a commercial stand-out at NVDA’s GTC Quantum Day, and soon thereafter highlight a range of commercial use cases in production at Qubits25,” the analyst summed up.
To this end, Ellis rates QBTS shares a Buy, with an $11 price target suggesting an 82% gain in the next 12 months. (To watch Ellis’ track record, click here)
Overall, there are 5 recent analyst reviews on file for D-Wave stock – and they are all positive, for a Strong Buy consensus rating. The shares are currently trading for $6.04, and the $8.63 average price target implies the stock has a one-year upside of ~43%. (See QBTS stock forecast)
Rigetti Computing
The second quantum stock we’ll look at, Rigetti Computing, has been in business since 2013. Rigetti describes quantum computing as the next generation of computing technology, a pioneering field whose contributions will have an impact similar to the Industrial Revolution or the start of the Digital Age. Rigetti’s work focuses on the development of scalable quantum computing systems, including the specialized semiconductor chips required to run qubit processing operations, the advanced super-cooling systems needed to support quantum computing hardware, and the quantum cloud services (QCS) software platform that can integrate quantum computers into existing public, private, or hybrid data clouds.
Rigetti aims to build the world’s most powerful computers, systems capable of using quantum mechanics to reduce the time and energy costs of high-performance computing by previously unimaginable factors—and of harnessing that speed and processing power to give users a uniquely powerful information processing capability. Rigetti’s quantum processors and software are potential answers to the growing need, across the economy, for faster and faster computing. Every field, from AI to finance to medical research to urban traffic routing, is a potential customer base for quantum computing companies.
Like D-Wave above, Rigetti has seen high volatility in its share price recently and has had several important news items. In November, the company held a direct offering of stock and raised $100 million in gross proceeds from the sale, an important boost to the firm’s cash position. And in December, Rigetti launched its new Ankaa-3 system, with an 84-qubit processor. The new quantum computer is the result of a comprehensive redesign of the hardware and has reached the 99.5% median two-qubit gate fidelity milestone. Rigetti’s scalable, industry-leading chip architecture – a key technology from the company – is featured in the Ankaa-3.
Looking at the share price, we find that RGTI stock is up 522% over the past year – even after this year’s volatility that saw the shares fall by 31%.
According to top analyst Ellis, Rigetti presents a sound option for investors interested in quantum computing. He sees the company holding an overall strong position and describes it in upbeat terms.
“We believe the company remains strongly positioned in superconducting-based quantum computing with its inherent differential equation-based optimizations. And indeed, we believe two of the most significant T3-month quantum developments — GOOGL’s Willow and China’s Zuchongzhi processor, were achieved on that modality, we believe a favorable backdrop T1-month as quantum computing stocks regained footing and began to re-accelerate, helped by RGTI’s much improved financial position following 4Q24’s financings,” Ellis commented.
Quantifying this stance, Ellis puts a Buy rating on RGTI shares, with a $15 price target that points toward a one-year gain of ~43%.
And he’s not alone – all 4 recent analyst reviews are bullish, earning RGTI a unanimous Strong Buy consensus. Trading at $10.52, the stock’s average price target of $15.67 is slightly more bullish than Ellis’, suggesting an upside of ~49% by the beginning of 2026. (See RGTI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
