This article first appeared on our U.S. website.

Quantum computing offers the promise of being the next big technological breakthrough after artificial intelligence (AI). The technology has drawn the interest of the U.S. government, which has been investing in the sector. Meanwhile, investors can buy the stocks of several public companies that are attempting to develop fault-tolerant quantum computers using a variety of different techniques.

Five of the best-known pure plays in the space are IonQ (NYSE: IONQ), Quantinuum (NASDAQ: QNT), Rigetti Computing (NASDAQ: RGTI), Infleqtion (NYSE: INFQ), and D-Wave Quantum (NASDAQ: QBTS). Let’s consider which of these quantum stocks looks like the best buy.

IonQ and Quantinuum

All quantum computers are built around qubits, which are extremely sensitive to even the slightest external interference. As a result, their computations have high error rates. The error-reduction and error-correction problems are among the chief challenges faced by every company trying to make quantum computing practical.

The two companies at the forefront of accuracy, though, are IonQ and Quantinuum. Both companies use trapped-ion technology: Each qubit in their computers is made out of an individual charged atom (aka, an ion). This method results in qubits that are more stable than qubits created using other techniques. The result is that IonQ has achieved 99.99% 2-qubit gate fidelity (a standard metric for quantum computing accuracy), while Quantinuum sits at 99.92%.

The companies differ primarily in how they hold their qubits in place. IonQ uses a combination of lasers and microwave antennas built into its chips, while Quantinuum employs only lasers, arguing that microwave antennas slow computational speed too much.

Quantinuum is known for its comprehensive software stack, while IonQ has been developing an entire quantum ecosystem, having made acquisitions in quantum sensing, networking, and satellite transmission. It is even in the process of acquiring quantum chip foundry SkyWater Technology, a deal that will enable it to manufacture its own chips in-house and become vertically integrated.

Rigetti Computing

Rigetti is pursuing one of the more common approaches to quantum computing: superconducting qubits. These are electronic circuits that can be made in conventional semiconductor fabs. While they must be brought to temperatures near absolute zero in order to operate, which requires expensive dilution refrigerators, they are controlled by microwave pulses, and the qubits don’t need bulky lasers to hold them in place.

The big advantage is that this technique provides much faster speeds than trapped-ion and other approaches. The disadvantage is that Rigetti lags in accuracy, with 2-qubit fidelity currently around 99.1% for its new Cepheus-1-108Q system. While that may sound close to the level that IonQ has reached, in the world of computing, it is considered way behind.

Infleqtion

Infleqtion has carved out a niche in quantum sensing and precision timing tools, giving it a solid revenue base as it pursues the development of a fault-tolerant quantum system using neutral-atom technology. Similar to trapped-ion technology, it creates each qubit out of an individual atom. But because it uses atoms that are not charged, they don’t repel each other. This allows neutral-atom systems to operate with higher qubit densities.

Right now, Infleqtion’s technology sits between trapped-ion and superconductor techniques. Its technology is faster than the trapped-ion approach but much slower than superconducting qubits. Meanwhile, the 99.73% 2-gate fidelity it recorded in 2024 is much better than Rigetti’s but still meaningfully trails its trapped-ion peers.

D-Wave Quantum

D-Wave Quantum has established itself as a leader in quantum annealing, which offers a niche solution for solving optimization problems. Because the technology is more mature and less complex, the company has already started to commercialize its systems, which can be particularly useful for certain industries like finance and logistics, where finding the most efficient solutions to complex problems (or even a solution that’s close to the best) can provide a company with competitive advantages.

Meanwhile, following its acquisition of Quantum Circuits, D-Wave is looking to apply what it learned in developing quantum annealing to superconducting qubit architecture. It plans to use Fluxonium qubits, which can remain in their quantum states longer, and a dual-rail gate-model processor with built-in error detection. It believes that by combining these technologies, it can create a system with the accuracy of a trapped-ion system and the speed of superconducting qubits.

The verdict

Ultimately, for those who want to invest in this still-speculative technology, taking a basket approach could prove to be a wise course, as no one knows yet which of the many qubit technologies will reach fault tolerance and commercial viability first. However, if I could only invest in one quantum stock, it would be IonQ. It has the accuracy lead today, and I think its ecosystem and vertically integrated approach should give it an advantage.

The post IonQ vs. Quantinuum vs. Infleqtion vs. Rigetti vs. D-Wave: Which Is the Best Quantum Computing Stock to Bet On? appeared first on The Motley Fool Canada.

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Fool contributor Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool recommends IonQ. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

Quantum computing stands at the frontier of technological disruption, promising to solve problems that standard systems struggle to tackle. For investors focused on artificial intelligence (AI), the opportunity is clear: Quantum systems can accelerate machine learning, optimize complex models, and unlock new layers of computational power that amplify AI’s broader impact.

Management consulting firm McKinsey & Company projects that quantum computing could generate as much as US$2.7 trillion in economic value by 2035, transforming industries from pharmaceuticals to financial services.

Against this backdrop, IonQ (NYSE: IONQ) has emerged as a standout pure play, distinguished by its vertically integrated business model that spans hardware, software, networking, and manufacturing.

With IonQ’s business accelerating, the question for investors is whether the stock represents a compelling buy as momentum builds.

IonQ’s revenue is surging, and visibility is expanding

IonQ’s second-quarter financial results underscored explosive demand. Revenue reached US$80 million, an increase of 287% year over year, and came in well ahead of earlier projections. Organic growth proved especially robust, with management affirming confidence in delivering 100% organic expansion for the full year.

Remaining performance obligations (RPO) surged 297% year during the past year to US$485 million, providing multiyear visibility into future sales. IonQ’s filings indicate that it expects roughly half of this backlog to convert into revenue during the next year, reinforcing the durability of the company’s near-term trajectory.

Does IonQ’s valuation make sense?

IonQ currently boasts a price-to-sales (P/S) ratio of 62. Although this is a meaningful discount from recent-year peaks, the multiple remains elevated relative to traditional technology peers — particularly given the company’s heavy investment phase.

During the second quarter, adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) losses totaled US$120 million — reflecting continued spending on research, development, and platform scaling. Although IonQ’s valuation profile has retreated from earlier exuberance, smart investors are still weighing whether its premium adequately accounts for the company’s operating deficits.

Does IonQ stock have upside?

One important detail to note from IonQ’s latest earnings report is that 2026 guidance excludes any contribution from the recently completed acquisition of SkyWater Technology. This omission is significant because the deal, alongside other recent acquisitions that are still being integrated, expands manufacturing capacity and accelerates progress toward fault-tolerant systems. Combined with the company’s surging order backlog, IonQ’s growth trajectory during the next couple of years could very well exceed current expectations.

Even if IonQ’s PS multiple remains unchanged during the next two years, the simple scaling of revenue toward the 2028 average analyst estimate of US$780 million would be enough to lift the company’s market capitalization from roughly US$17.4 billion today to about US$48.4 billion. That expansion produces an implied share price near $128 — nearly tripling your investment. This math shows that a modest $1,000 investment in IonQ stock today could reach more than $2,900 in just the next couple of years, implying upside of nearly 297%.

This forecast demonstrates that IonQ does not need any multiple expansion for the stock to deliver substantial returns. Revenue growth itself is enough to generate meaningful share price appreciation. That said, this forecast rests on a series of optimistic assumptions around sustained execution, successful acquisition integrations, and broader market adoption of quantum systems.

Considerable operational hurdles definitely remain. Even so, the combination of a strong order backlog, vertical integration, and an expanding footprint creates an promising opportunity for patient investors willing to take on the risks inherent in a still-nascent pocket of the AI realm.

The post Prediction: A $1,000 Investment in IonQ Could Be Worth This Much by 2028 as Revenue Soars 287% and Its Backlog Grows Even Faster appeared first on The Motley Fool Canada.

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Fool contributor Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool recommends IonQ. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

If you want quantum computing exposure without betting the farm on a pre‑profit science project, I think a case is building that Microsoft (NASDAQ: MSFT) is the more interesting option right now.

Microsoft is a US$3 trillion AI stock whose own quantum roadmap has matured quietly in the background, and with sentiment cooled after a year of worry about AI spending, you’re getting that quantum upside at what looks like a multiyear valuation low instead of peak euphoria.

Microsoft is already a quantum platform

Microsoft doesn’t market itself as a quantum stock, but its Azure Quantum materials read like a company that has spent years building a full stack.

Azure Quantum is a cloud service where developers can run quantum programs today on hardware from partners such as IonQ (NYSE: IONQ), Rigetti (NASDAQ: RGTI), Quantinuum (NASDAQ: QNT), and Pasqal, or on advanced simulators, using the same Azure environment they use for AI and high-performance computing. That matters. Quantum is not off in a lab. It’s already being wired into Microsoft’s mainstream developer tools and cloud workflows.

In its quantum overview, Microsoft describes Azure Quantum as an “open, flexible, and future-proofed path” that adapts to how customers actually work. The company is effectively acting as the orchestrator, sitting between enterprise demand and multiple hardware providers. That is a very different position from a single hardware vendor trying to persuade the world to come and build on its island.

Azure Quantum Elements and the long game

The part that really shifts the story for me is Azure Quantum Elements. In 2023, Microsoft announced this system with a bold goal: Compress 250 years of chemistry and materials science progress into the next 25. Quantum Elements combines Azure high-performance computing, AI models from the AI4Science team, and quantum capabilities to let scientists search a vastly larger design space for new materials and molecules than classical tools alone can handle.

In its own words, Microsoft talks about speeding up some chemistry simulations by factors in the hundreds of thousands and expanding candidate materials from thousands to tens of millions. Customers are already using this stack to reshape their research pipelines today while preparing for scaled quantum hardware later. That is exactly the kind of “earn while you learn” model you want as an investor. The company now makes money from AI and high-performance computing while building the bridge to a future quantum supercomputer.

Why this looks different from pure plays

Contrast that with the pure-play names. IonQ’s latest investor materials outline a roadmap to multimillion-qubit systems by 2030 and highlight its position as a full-stack quantum platform spanning computing, networking, and sensing. Rigetti is focused on superconducting hardware, touting a 108-qubit processor available through Amazon Braket and a letter of intent for up to US$100 million in U.S. government funding. D-Wave (NASDAQ: QBTS) is selling a 4,400-plus-qubit Advantage2 annealing system, emphasizing connectivity, coherence, and energy-efficient processing for optimization and materials use cases.

These companies are pushing the frontier and deserve credit for it. They are also, by design, narrow bets. Revenue is still modest, funding is lumpy, and their fortunes depend heavily on how quickly quantum workloads move from pilots to production. If you get the timing wrong, you’re exposed to both technology risk and capital markets risk.

With Microsoft, quantum is one pillar inside a much broader AI and cloud story. Azure Quantum rides on top of a business that already generates massive cash flows from AI, cloud infrastructure, and software, and that can fund long-duration R&D in topological qubits without betting the company. If the quantum timeline slips, you’ll still be a leader in AI and cloud. If the timeline holds and Microsoft’s qubit approach works, you’re suddenly holding a stock that controls both the classical and quantum rails of the next computing era.

To me, the practical takeaway is simple. If you want exposure to quantum, but you also care deeply about downside protection, Microsoft offers a more balanced way in than IonQ, Rigetti, or D-Wave. You get immediate participation in AI and cloud, plus optionality on quantum computing that’s already being woven into real customer workloads, all at a valuation the market has derated from its AI peak.

The post This Trillion-Dollar AI Stock Offers Better Quantum Computing Exposure Than IonQ, Rigetti, or D-Wave at a Multi-Year Valuation Low appeared first on The Motley Fool Canada.

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The Motley Fool recommends IonQ and Microsoft. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

In many respects, IonQ (NYSE: IONQ) looks like an intriguing investment. The potential for growth in the quantum computing industry naturally draws a lot of interest, and the company’s approach to the technology holds the potential to define the industry.

There are numerous companies attempting to develop quantum computers, and they’re using an array of disparate technologies to create the qubits (quantum bits) that sit at the heart of all such systems.

IonQ uses trapped-ion technology, meaning every qubit is created using a single charged ytterbium atom, held tightly in place using electromagnetic forces and manipulated using lasers. Those ions can be held in a stable quantum state for a relatively long period, so that approach seems to have given IonQ an advantage over other platforms.

Moreover, its all-to-all connectivity allows all qubits within an ecosystem to communicate with each other regardless of location. In contrast, other systems require the qubits to be next to one another to interact directly with each other.

However, potential does not necessarily translate into long-term success for quantum computing stocks.

One way to gauge how likely it is that IonQ will ultimately succeed is to take a look at history — specifically, the history of other start-up companies in past emerging industries. And based on that history, there are good reasons to think IonQ is not a no-brainer buy.

History and IonQ’s financials

Given the potential of IonQ’s technology and the buzz about the possibilities of quantum computing in general, investors might forget that this company is a start-up. This comes with numerous disadvantages.

The most obvious challenge is its dependence on its technology. Although trapped-ion qubit technology and all-to-all connectivity are competitive advantages, buying IonQ stock is basically an all-in bet that it can succeed with those technologies.

Another major hurdle is the company’s financials. In the first quarter, it reported US$65 million in revenue and US$272 million in operating losses. This means it depends on outside capital to stay in business.

Thanks to prior capital raises, it holds just over US$2 billion in liquidity, which should sustain it through a couple more years of losses. IonQ has not taken on significant debt; it raised capital by issuing more shares. In the last year alone, IonQ’s outstanding share count rose by 15%, significantly diluting its prior shareholders.

From a historical standpoint, this approach is not unusual. If the company’s financial situation improves, it could bolster a stock price that has risen by more than 220% since its 2021 IPO. However, history also shows that such start-ups can fall into penny-stock status if they have trouble raising money and cannot turn profitable.

Competing with other companies

Worse, it has to stand out from other quantum computing pure plays such as Rigetti Computing (NASDAQ: RGTI) and D-Wave Quantum (NASDAQ: QBTS), which employ their own unique approaches to the technology in hopes of gaining a competitive advantage. From today’s investor perspective, it is unclear if IonQ or any of these companies will become industry leaders.

Additionally, it competes with established tech giants such as Alphabet (NASDAQ: GOOG) and IBM (NYSE: IBM), which are pursuing their own projects in the quantum computing space. These companies have plenty of money to dedicate to R&D, and could potentially buy or replicate IonQ’s technology if they wanted to. Similar situations boded poorly for many small companies during the internet boom.

Nonetheless, companies like IonQ are taking unusual approaches to this speculative new technology, and small nimble start-ups can display more openness to innovation than large established companies. The internet boom gave the world examples of well-established companies that failed to seize the opportunities in front of them.

Jeff Bezos founded Amazon (NASDAQ: AMZN) in 1994, the year after Sears shut down its catalog business rather than moving it online. Lucent Technologies was originally Bell Labs, the innovation arm of the original AT&T (NYSE: T). Despite its supposed advantages, Lucent failed to develop the Internet Protocol (IP) technology that spawned the growth of Cisco (NASDAQ: CSCO). Consequently, Alcatel (which Nokia (NYSE: NOK) later bought) acquired what was left of the one-time innovation leader.

Unfortunately for IonQ, both Alphabet and IBM have invested heavily in quantum computing technologies. Hence, they are much less likely to become the Sears or Lucent of this new tech industry.

Still, neither tech giant is pursuing trapped-ion qubit technology. If that approach leads to a more consistent and less error-prone performance than Alphabet’s or IBM’s superconducting qubits, IonQ could make investors a fortune.

History and IonQ stock

Ultimately, looking at the history of companies that were once in similar positions to the one IonQ occupies today reveals why it’s far from a no-brainer buy. Investors who want to add it to their portfolios should treat it as a speculative investment, and size their positions accordingly.

Yes, it has potential, if everything goes right. Unfortunately, companies that consistently report massive losses and depend too heavily on outside capital can run out of time for things to go right. Such conditions likely mean that IonQ’s technology will really have to stand out above the rival offerings of both the large tech sector incumbents and the many other start-ups for the company to succeed.

Although IonQ uses an approach that could redefine its industry, Alphabet, IBM, and a host of other players have also invested heavily in quantum computing. If they match or outperform IonQ’s technology, IonQ may struggle to survive. As such, investors should approach this stock cautiously.

The post Is IonQ Stock a No-Brainer Buy? Here’s What History Says. appeared first on The Motley Fool Canada.

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Fool contributor Will Healy has no position in any of the stocks mentioned. The Motley Fool recommends Alphabet, Amazon, Cisco Systems, International Business Machines, and IonQ. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

Quantum computing promises to be one of the next big things in technology, and that’s prompted many growth investors to pile into the industry. But when we think “next big thing,” that doesn’t necessarily mean tomorrow or even a year or two from now. One thing that’s held some investors back from getting in on this high-potential technology is the idea that its usefulness may be many years or even decades away.

Even experts haven’t always been certain about when this exciting technology might become part of our daily lives. Early last year, Nvidia (NASDAQ: NVDA) chief Jensen Huang said quantum computing was decades away from the point of being very useful. A few months later, Huang said otherwise and even announced the creation of a quantum computing research center. And Microsoft (NASDAQ: MSFT) co-founder Bill Gates said last year that the technology might be ready to solve big problems in three to five years.

The reason it’s taking a while for quantum computing to become very useful is due to the complexity of the technology. It involves using qubits for calculations rather than the bits used by classical computers — and qubits are fragile and often difficult to scale up. But there’s reason to be optimistic about the progress of certain companies. In fact, two quantum stocks are further along than anyone is giving them credit for.

Let’s check them out.

Microsoft

You probably know Microsoft well for its software suite, including popular products like Word and Excel, and you might even be familiar with the company’s cloud computing business. These are major engines, driving years of revenue and profit growth — and this has translated into returns for investors, too, with the stock rising 700% over the past decade.

But, while Microsoft is a well-established business you can count on, it’s also exploring new technologies with the energy of a young start-up. In fact, in quantum computing, it’s making major strides and progress that could reduce the time to usefulness. A little over a year ago, Microsoft introduced its Majorana 1 chip — the big news here is that it uses a type of material, the topoconductor, which can lead to the production of more scalable and reliable qubits.

As Microsoft says, this architecture may address problems at an industrial scale in just a few years. The company is on track to fit one million qubits on a chip that can fit in your palm.

Meanwhile, Microsoft’s financial strength can support the investment needed to reach this and related goals. All of this makes Microsoft the ideal choice for an investor looking for safety along with growth.

IonQ

IonQ (NYSE: IONQ) is a pure-play quantum computing company, so it represents more risk than a tech giant like Microsoft. Though the company generates revenue from its quantum systems, it isn’t yet profitable on an operational basis and must continue to invest heavily in research and development. But this is pretty standard for a young company specializing in quantum computing.

This company reached a key milestone last year — and one that’s a record in the performance of quantum systems. IonQ delivered 99.99% two-qubit gate fidelity. What does this mean? IonQ tackled one of the biggest problems facing quantum computing these days, and that’s the error rate. “Two-qubit gate fidelity” is a measure of accuracy, and reaching almost 100% is a huge accomplishment. So far, IonQ is the only quantum company to attain this accuracy level. IonQ says this sets it on the path to ramp up to millions of qubits by 2030, suggesting that usefulness may be right around the corner.

IonQ is known for its technology of using atoms, transformed into trapped ions, as qubits. They offer several advantages, including the ability to interact with each other and the fact that they can maintain superposition for quite some time.

Though the quantum computing timeline still isn’t certain, IonQ may be further along than anyone is giving it credit for.

The post 2 Quantum Computing Stocks That Are Further Along Than Anyone Is Giving Them Credit For appeared first on The Motley Fool Canada.

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Fool contributor Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends IonQ, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

Quantum computing investing isn’t at the forefront of most investors’ minds right now. Artificial intelligence (AI) investing is. However, that makes it the perfect time to consider scooping up shares of companies involved in quantum computing, as you don’t have to pay the premium that these stocks get priced with when the hype cycle swings in the positive direction.

There are three quantum computing stocks that I’m excited about over the long term, and some of them are benefiting from AI tailwinds right now. I think that makes them smart investments, and if you’re looking to increase your exposure to quantum computing before it arrives over the next few years, I think these three are genius buys.

Alphabet

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is one of the legacy tech companies pursuing quantum computing. It makes a ton of sense, as it has to use other companies’ products for traditional computing units, but if it can develop a quantum computing unit in-house, it can boost its margins. Undoubtedly, Alphabet would monetize this product through its cloud computing division, allowing users to access either traditional or quantum computing power. That could unlock a new growth wave for Google Cloud, but it doesn’t really need it right now.

AI demand is massive, causing Google Cloud’s revenue growth rate to spike to 82% year over year. With Alphabet spending around US$200 billion on data center capital expenditures this year, it will likely accelerate this growth rate for the foreseeable future as it burns through a US$514 billion backlog.

On the quantum front, Alphabet has been relatively quiet lately, but it’s undoubtedly pushing the limits of what its Willow quantum computing chip can do. At one of the last updates investors received from Alphabet, it had just developed a quantum algorithm that provided a verifiable advantage over traditional computing methods.

They’re likely pushing the limits of what’s possible, and I’m still bullish on Alphabet to develop a viable quantum computing unit, as it has nearly unlimited resources to do so.

IonQ

A smaller player in the quantum arms race is IonQ (NYSE: IONQ). IonQ is taking a different approach than most by deploying a different quantum computing technique known as trapped ion. This has advantages and disadvantages, with the primary benefit being improved accuracy and the drawback being processing speed. With quantum computing accuracy being a huge roadblock, having the most accurate technology possible is a big win for IonQ.

We’ll see how this pans out over the long term, but it has a blueprint to produce a 10,000-qubit computer, well above the threshold of what’s required for commercial feasibility. IonQ is more of a long-shot investment, but with its small size, if it pans out, it will be a huge winner for investors.

Nvidia

Last is Nvidia (NASDAQ: NVDA), which is a giant in the traditional computing space. Nvidia has no plans to develop a quantum processing unit. Still, it is doing everything it can to ensure that its traditional computing units can be used alongside quantum units in a hybrid computing approach. To support this, Nvidia has done several things, like develop an AI model to help with quantum error correction, adapt its CUDA software to quantum computing processes, and produce the NVQLink, which allows quantum processing units from various companies to plug into existing computing infrastructure.

These products will ensure Nvidia’s GPUs remain the gold standard for traditional computing units. If the future is a hybrid approach, then Nvidia will stand to benefit as quantum computing rolls out. With Nvidia also benefiting from a massive demand wave in the AI sector, it’s a great stock pick from that perspective, too.

The post 3 Stocks That Smart Quantum Computing Investors Are Buying appeared first on The Motley Fool Canada.

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Fool contributor Keithen Drury has positions in Alphabet, IonQ, and Nvidia. The Motley Fool recommends Alphabet, IonQ, and Nvidia. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

Shares of IonQ (NYSE: IONQ) stock jumped nearly 9% Monday and the momentum kept going Tuesday after investment bank Wedbush assumed coverage of the stock with an outperform rating. It assigned the US$40 stock a US$75 price target — basically predicting a double in 12 months. As of Tuesday’s close, IonQ stock had soared 16% since the markets opened Monday morning.

Why Wedbush loves quantum computing

Valued at US$16.65 billion in market capitalization, IonQ is by this measure one of the most richly priced quantum computing stocks — but Wedbush thinks IonQ is worth the premium. With US$187 million in trailing revenue, IonQ’s business is about 15x bigger than its nearest rival among the pure-play quantum computing stocks. With US$2 billion in the bank, it’s also the best-funded. Finally, IonQ is the only one of these pure plays on quantum computing to own its own chip foundry, SkyWater, which IonQ brought in-house last month.

Over time, Wedbush thinks investors will see quantum stocks evolve from research-and-development shops solving engineering and physics problems into “efficient and scalable businesses” that earn profits and generate positive free cash flow. As this happens, IonQ’s ability to manufacture its own chips in-house, to iterate rapidly and improve the design of its products, could give it an edge over smaller rivals such as Rigetti Computing (NASDAQ: RGTI) and D-Wave Quantum (NASDAQ: QBTS).

What’s next for IonQ stock

Just don’t expect financial success to happen overnight.

Despite boasting substantially more revenue than all its pure-play rivals combined, IonQ still isn’t profitable, reporting US$510 million in losses last year. Analysts think IonQ might earn a profit this year, but will quickly resume losing money — and indeed, keep on losing money as far out as any analysts are making forecasts — 2030 to be precise.

That year, IonQ is forecast to lose US$650 million.

Investing in this one is going to require both patience and risk tolerance.

The post Why IonQ Stock Is Up 16% This Week appeared first on The Motley Fool Canada.

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Fool contributor Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends IonQ. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

Quantum computing occupies a strange place in the investing universe. The technology promises to revolutionize everything from drug discovery to cryptography, and it overlaps with artificial intelligence in ways that could accelerate both fields.

While traditional computers process information one step at a time using bits that are either 0 or 1, quantum computers use qubits that can represent both states at once. This gray-scale quality allows them to explore many possible answers simultaneously, potentially solving certain complex problems far faster. For investors, that could unlock meaningful gains in lucrative industries, but the technology is unproven at scale, and the handful of pure-play quantum computing stocks are not yet profitable.

Still, the U.S. government keeps writing checks to accelerate research in this field. Retail investors search for IonQ (NYSE: IONQ) and Rigetti Computing (NASDAQ: RGTI) hundreds of thousands of times per month. Others have turned to quantum computing ETFs to spread their bets across the sector. Yet, most of those contracts have had no material, long-term impact on share prices, according to a Motley Fool analysis. As of mid-2026, over the past year, a basket of 11 pure-play quantum stocks tracked in this analysis has trailed the Nasdaq-100.

That gap between enthusiasm and returns tells a promising story. Quantum computing is real, the game-changing potential is undeniable, and the government funding is serious. With US$151 million in obligated federal dollars since 2008, the U.S. Department of Defense is picking up most of the tab so far. This next-generation computing technology has massive implications for national security, so the government needs to take a deep interest in it. The U.S. wants to be on the leading edge if and when quantum computers start to break encryption or revolutionize military strategy.

Still, a Motley Fool analysis of stock price reactions to individual contract awards found that government money rarely moves these stocks in any lasting way.

This is actually good news, in a counterintuitive way. It means investors can stop chasing funding headlines and start evaluating these companies on what actually matters: the technology, the competitive landscape, and the long road to commercialization.

Which quantum computing companies have received the most U.S. government funding?

Federal funding has not been distributed evenly across the quantum computing sector. Infleqtion (NYSE: INFQ), formerly known as ColdQuanta, leads all companies with approximately US$90 million in obligated federal dollars since 2008. IonQ, Rigetti, and privately held PsiQuantum round out the top four recipients, though the total figures for those three companies fall below Infleqtion’s share.

Infleqtion leads federal funding because its neutral-atom technology operates at room temperature, allowing for portable, field-deployable hardware that pure-play computing rivals can’t match. This unique hardware enables the company to secure contracts for both long-term quantum computing and immediate national security needs, like GPS-free military navigation and quantum sensing. And the company has been around for decades under two different names.

Ultimately, its almost two-decade track record with agencies like DARPA and the U.S. Department of Defense has made it the government’s most trusted partner for domestic quantum infrastructure. When the government’s CHIPS funding came around, Infleqtion was poised to grab the lion’s share.

Then there is D-Wave Quantum (NASDAQ: QBTS), sitting at the bottom of the leaderboard with just US$40,000 of federal funding awards. That is not a typo — forty thousand dollars, across almost two decades of federal quantum spending.

Four of the companies in this analysis have received exactly zero U.S. federal funding for one simple reason: Xanadu Quantum Technology (NASDAQ: XNDU), Horizon Quantum (NASDAQ: HQ), Arqit Quantum (NASDAQ: ARQQ), and IQM Quantum Computing (NASDAQ: IQMX). The common thread? These four are headquartered outside the United States, which makes them ineligible for most U.S. federal contracts and grant programs. (Xanadu is based in Toronto.)

The CHIPS Act complication

In May 2026, the U.S. Department of Commerce announced that nine quantum computing companies had signed letters of intent for US$2.013 billion in CHIPS Act funding. That figure dwarfs the US$151 million obligated over the prior 18 years. Headlines were written. Stocks popped. Investors got excited.

Twenty trading days later, every single one of those gains had evaporated.

The letters of intent are non-binding pledges, not actual money. Until binding agreements are signed and funds are formally obligated, the US$2 billion exists only as a press release. This analysis excludes CHIPS Act pledges from all funding totals for that reason. That act brought significant funding to many semiconductor companies, but the quantum computing provisions were less impressive.

Do government contracts actually move quantum computing stocks?

The short answer: Rarely.

A Motley Fool analysis of stock price reactions to individual U.S. federal contract awards found that the typical contract produces no measurable long-term effect on share prices. This holds even after controlling for overall market movement and sector-wide swings among quantum peers.

If anything, the pattern runs slightly negative. Companies that received contracts tended to underperform both the Nasdaq and other quantum stocks in the weeks following an award. Buying quantum stocks on contract news would have been a losing strategy more often than not, especially if you didn’t see the temporary jump coming ahead of time. Most investors are locked in inflated starting prices with limited staying power.

The exception that proves the rule

IonQ’s stock did see significant, long-term gains after the company was awarded a US$13.4 million Air Force Research Laboratory contract in 2022. The military ordered a trapped ion quantum computer from IonQ, and the stock posted a sustained double-digit gain that held up even after accounting for market and peer movements. IonQ delivered the computer in 2025. The Air Force isn’t using the system for military operations, but it’s gaining experience with quantum computing to take advantage of it once such systems become powerful enough. Early tests included sending quantum data via visible light signals — a first step toward combining quantum computing with fiber-optic communications equipment.

That contract was IonQ’s largest and most heavily publicized award, though. The lesson: a contract has to be big enough and newsworthy enough to break through the noise. A US$2 million award buried in a government database doesn’t move the needle, and the money isn’t enough to fund quantum research with market-moving implications in the long run.

Should government contracts factor into a quantum computing investment?

Here is the honest answer: Government funding is a signal that smart people in national security think quantum computing matters. It is not a guarantee (or even a suggestion) that any particular stock is about to go up.

The CHIPS Act announcement moved prices for about three weeks. Individual contracts barely register. Investors who built a strategy around chasing government headlines would have been disappointed repeatedly.

That finding is not an argument against quantum computing stocks. It is an argument for tuning out the funding noise.

The technology has genuine long-term potential, and the federal government’s continued interest is one data point in its favor. But “the government gave this company money” is not an investment thesis. It is a headline, quickly forgotten on Wall Street and rarely making a notable difference to the company’s business prospects.

Investors interested in quantum computing have better questions to ask. Which companies are making technical progress? Who has a credible path to commercialization? What does the competitive landscape look like in five years? Those questions are harder to answer than “who got the biggest contract,” but they are the ones that matter.

The next government headline is unlikely to provide a useful signal for any of those factors.

The post Which Quantum Computing Stocks Get the Most U.S. Government Funding – and Does It Matter? appeared first on The Motley Fool Canada.

More reading

• IonQ vs. Quantinuum vs. Infleqtion vs. Rigetti vs. D-Wave: Which Is the Best Quantum Computing Stock to Bet On?

The Motley Fool recommends IonQ. The Motley Fool has a disclosure policy.

This article first appeared on our U.S. website.

I won’t get too technical, but here’s the main idea behind quantum computing: Traditional computers, like the one I’m using to write this article, depend on binary “bits” of information — things that can exist in two states (generally referred to as 0 or 1). If you’ve ever heard of binary code, this is how it works, by using a combination of zeros and ones to convey information. Unfortunately, this has its limitations in terms of how fast computers can be.

Quantum computers, on the other hand, use “qubits,” which use the laws of quantum mechanics to exist in many possible states. This is a simplification, and there’s quite a bit more to it than this, but that’s the basic idea. Theoretically, large-scale quantum computers will eventually be able to solve problems in minutes that would take a traditional computer hundreds of years. This could have massive implications for some of the advanced technologies that are rapidly evolving today, such as artificial intelligence, autonomous vehicles, and more.

To put it mildly, there are some problems that need to be solved before quantum computing can come close to realizing its potential and reach commercial viability. But this is a massive market opportunity, and you can invest in this massive technology trend while it’s still in the early stages of its evolution.

The Defiance Quantum ETF

Although quantum computing is an interesting investment opportunity, choosing individual quantum stocks can be challenging. There are promising start-ups like Rigetti Computing (NASDAQ: RGTI), massive tech behemoths with quantum computing operations like IBM (NYSE: IBM), and everything in between. There are also adjacent opportunities — meaning companies that won’t produce quantum computers but will benefit from them.

That’s why I’m leaning toward the exchange-traded fund (ETF) approach. One particular quantum computing ETF that has found its way to my watch list is the Defiance Quantum ETF (NASDAQ: QTUM).

The Defiance Quantum ETF tracks an index of quantum computing stocks and owns 86 companies in its portfolio. Arqit Quantum (NASDAQ: ARQQ) is the top holding, but it only makes up 1.7% of the assets, so it’s not a particularly concentrated fund. Other holdings include Advanced Micro Devices (NASDAQ: AMD), Intel (NASDAQ: INTC), D-Wave Quantum (NASDAQ: QBTS), and Tower Semiconductor (NASDAQ: TSEM), just to name a few.

In a nutshell, if quantum computing ends up being the technological revolution that many experts think it will be, this ETF allows you to benefit regardless of which individual companies end up the biggest winners. It is a diversified collection of dozens of computer manufacturers, chipmakers, software companies, and more, all of which have a lot to gain if quantum computing as an industry reaches mainstream viability.

The ETF has an expense ratio of 0.40%, which is high compared to, say, an S&P 500 index fund, but is very much on the lower end when it comes to specialized ETFs. For example, it’s tough to find an artificial intelligence or robotics ETF with an expense ratio below 0.6%, so this is actually a quite reasonable fee structure.

Should you buy the Defiance Quantum ETF right now?

Let’s be clear. Quantum computing is an industry in its infancy. Even if you invest through a well-diversified ETF like this one, it’s wise to expect a roller-coaster ride for the foreseeable future. And if things don’t go as well as expected for the technology, you could potentially lose significant money. Of course, the ETF has plenty of large-cap, mainstream tech stocks that should be fine regardless of what happens with quantum computing, but there are also plenty of pure-play quantum stocks.

Having said all of that, I’m considering opening a relatively small position in the Defiance Quantum ETF to add some quantum computing exposure to my portfolio. An ETF that focuses on an early-stage technology like this isn’t for everyone, but it could be a big winner if quantum computing ultimately becomes a mainstream technology.

The post 1 Impressive Quantum Computing ETF I’m Strongly Considering Right Now appeared first on The Motley Fool Canada.

More reading

• Why I’m Not Worried About This Stock’s 37% Drop
• IonQ vs. Quantinuum vs. Infleqtion vs. Rigetti vs. D-Wave: Which Is the Best Quantum Computing Stock to Bet On?

Fool contributor Matt Frankel, CFP® has positions in International Business Machines. The Motley Fool recommends Advanced Micro Devices, Intel, and International Business Machines. The Motley Fool has a disclosure policy.

Quantum computing harnesses the rules of quantum mechanics to process information differently than classical computers. Instead of bits locked as zeros or ones, quantum systems use qubits that can exist in superposition — holding multiple states at once. In artificial intelligence (AI), quantum computing stands out as a major frontier because hybrid quantum-classical systems stand to accelerate machine learning, improve generative models, and tackle problems in areas like logistics or neural network design.

Management consulting firm McKinsey & Company estimates that quantum computing could unlock up to US$2.7 trillion in global economic value by 2035. Prominent use cases span drug discovery, portfolio optimization and risk modeling, and supply chain efficiencies.

Early value will likely come from hybrid approaches that pair quantum processors with classical AI and high-performance computing. Against this backdrop, I see some parallels between IonQ‘s (NYSE: IONQ) quantum computing approach and Palantir Technologies‘ (NASDAQ: PLTR) ascent to dominating the AI software landscape.

What makes IonQ unique?

IonQ’s approach to quantum computing is to build its systems around trapped ions — individual atoms held in place and manipulated with lasers. This approach aims to deliver identical qubits with exceptionally high operational accuracy and flexibility, allowing any qubit to interact directly with another.

Rather than focusing purely on hardware, IonQ has built a full-stack quantum platform spanning computing, networking, sensing, and security. The company has achieved this through a series of acquisitions that added photonic interconnects for scalable networking, advanced electronic control techniques to facilitate manufacturing, and quantum-safe communications capabilities.

The company’s revenue growth has been striking: IonQ generated US$130 million in 2025, representing 202% growth over the prior year and making it the first public quantum business to surpass US$100 million in annual revenue. In the first quarter of 2026, IonQ brought in US$64.7 million in sales and guided between US$260 million and US$270 million in revenue for the full year as remaining performance obligations (RPO) grew 554% to US$470 million.

Analyzing IonQ’s valuation profile

IonQ’s current market capitalization is US$13.2 billion. At the high end of its 2026 revenue guidance, this implies a forward price-to-sales (P/S) multiple of 49, which is well above the typical hardware or software companies.

While the company maintains ample liquidity on its balance sheet, IonQ remains consistently unprofitable. Heavy ongoing investments in research, scaling systems, and integrating acquisitions have driven ongoing EBITDA losses and eaten into the company’s runway.

What makes IonQ the next Palantir?

Palantir turned big data analytics into mission-critical software for enterprises and government agencies alike. IonQ is attempting something analogous by creating an end-to-end quantum AI ecosystem. I think IonQ echoes Palantir’s early trajectory as a specialized platform company tackling a transformative domain featuring both government and commercial traction, rapid top-line expansion, and a defensible technological edge.

Is IonQ a good stock to buy today?

IonQ’s valuation is undeniably stretched compared with its near-term fundamentals. Nevertheless, the combination of the company’s technological differentiation and its progress toward a comprehensive platform could make the premium more justified for investors who have a long-term horizon.

With that said, IonQ stock is not a low-risk buy today. While the company’s unique profile and growth trajectory may render the valuation reasonable rather than completely detached from reality, investors should be convinced that quantum computing will deliver on its promise before blindly pouring into the stock.

Learn more: 9 Best Quantum Computing Stocks for 2026 and How to Invest

The post 1 Quantum Computing Stock That Could Be the Next Palantir appeared first on The Motley Fool Canada.

More reading

• IonQ vs. Quantinuum vs. Infleqtion vs. Rigetti vs. D-Wave: Which Is the Best Quantum Computing Stock to Bet On?

Fool contributor Adam Spatacco has positions in Palantir Technologies. The Motley Fool recommends IonQ and Palantir Technologies. The Motley Fool has a disclosure policy.