Two Quantum Computing Shares that Potentially Magnify Your Investment Portfolio
Quantum computing shares have become one of the most popular investment trends in 2024, with the Defiance Quantum ETF (QTUM) increasing by 49.4% so far this year, nearly doubling the robust 24.3% growth of the S&P 500. Despite the fact that widespread commercial quantum computers could take several years to develop, significant technological advancements have sparked a frenzy in the sector, which many believe to be on the verge of a major computing revolution.
The enthusiasm isn't just based on speculative expectations. In 2024, quantum computing achieved two major breakthroughs, suggesting we may be approaching a technological turning point.
Alphabet (GOOG, GOOGL) made history with their Willow quantum computing system, which demonstrated the ability to reduce errors exponentially as the number of qubits increases. This breakthrough solved a problem that had puzzled researchers for nearly 30 years. Even more impressively, Willow completed a computation in under five minutes that would require the fastest supercomputers today 10 septillion years to complete -- a timespan far greater than the age of the universe.
Inflectron, a quantum computing start-up, teamed up with Nvidia (NVDA) to achieve another first in 2024 by demonstrating a practical materials science application using logical qubits. This breakthrough resulted in a 6x increase in computational accuracy, suggesting that quantum computing has the potential to revolutionize a wide range of fields, including battery technology and superconductors.
While quantum computing is still in its infancy, these early advancements, driven by tech giants Alphabet and Nvidia, could indicate the dawn of a new computing era. Two companies are leading this transformative technology, which could significantly boost your portfolio in 2025 and beyond.
Industry leadership through quantum execution
IonQ (IONQ), a leader in trapped-ion quantum computing, has emerged as one of the standout stocks in the quantum computing sector in 2024. The company's unique approach, which utilizes ionized atoms as the core of its quantum systems, allows for longer and more sophisticated calculations with fewer errors than competing methods. IonQ's platform is compatible with all major cloud providers and supports multiple programming languages, making quantum computing easily accessible to developers and researchers.
IonQ's competitive edge comes from its deep academic roots in ion trap technology, which span over 25 years of research, and its proven commercial traction through government and enterprise partnerships. The company has also expanded into quantum networking, bridging the gap between quantum computing and the future quantum internet.
Despite IonQ's impressive 258.5% stock growth in 2024, the company remains unprofitable and faces significant technological and commercialization risks. The quantum computing industry is still in its early stages, with uncertain timelines for achieving practical advantages over classical computers. Competition from tech giants and other quantum start-ups, as well as the potential for technological obsolescence, represent major risks to IonQ's market position.
Nevertheless, IonQ's growing commercial momentum, expanding quantum networking business, and strong balance sheet of $382.8 million at the end of the most recent quarter put it in a strong position to capture a significant share of what could become a multitrillion-dollar quantum computing market. For high-risk investors with a long-term perspective, IonQ offers direct exposure to one of technology's most promising frontiers.
Industry leadership through superconducting innovation
Quantum computing pioneer Rigetti Computing (RGTI) takes a different approach to quantum computing than IonQ, using superconducting circuits instead of trapped ions. The company's vertically integrated strategy, which includes Fab-1, the first dedicated quantum foundry, gives Rigetti control over the entire quantum chip development process, allowing for rapid innovation and protection against supply chain risks.
Rigetti's latest Ankaa quantum processor architecture has achieved a 98% two-qubit gate fidelity, marking significant progress in quantum performance. The company's focus on scalability through a modular chip design allows larger quantum systems to be built from smaller, identical components. Rigetti has also established strong partnerships across government, research, and commercial sectors.
Like other quantum companies, however, Rigetti faces major technological challenges and remains unprofitable. The stock's 851.2% surge in 2024 and valuation of 130 times sales indicate investors are anticipating significant future growth potential. Nonetheless, Rigetti's integrated manufacturing approach, improving quantum performance metrics, and clear technology roadmap through 2025 make it an intriguing pure-play option for investors seeking exposure to superconducting quantum computing technology.
The quantum investing strategy: Pure plays vs. tech giants
While tech giants like Alphabet and Nvidia have made progress in quantum computing, their massive market capitalizations mean that quantum breakthroughs will likely have little impact on their stock prices. Pure-play quantum companies like IonQ and Rigetti offer more direct exposure to the technology's potential, but with significantly higher risk. Each represents a different technological approach -- trapped ions versus superconducting circuits -- and both could emerge as winners in what could become a massive new computing market.
Given the early stage and complexity of quantum computing, however, many investors may prefer a more diversified approach. The Defiance Quantum ETF offers this, combining pure-play quantum stocks with established tech leaders advancing the technology. With quantum computing potentially approaching an inflection point, investors now have multiple ways to position themselves for what could become one of the most transformative technologies of our time.
Investors looking to capitalize on the potential of quantum computing may want to consider diverting some of their finance into this sector. The impressive growth of IonQ, a leader in trapped-ion quantum computing, could make it an attractive option for high-risk investors with a long-term perspective, as it aims to capture a significant share of the anticipated multitrillion-dollar quantum computing market.
Furthermore, investors interested in superconducting quantum computing technology might find Rigetti Computing compelling. The company's focus on scalability and innovation through a vertically integrated strategy has positioned it as a potential winner in this emerging field, offering investors a unique opportunity to invest in this promising technology.