Rigetti is making progress, but his quantum computing systems are prone to errors, and the company is burning money.
IBM, meanwhile, is a quantum company, backed by its legacy business.
This allows IBM to attack quantum computing with two very different chips.
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Give up the calculation(NASDAQ: RGTI) has been one of the hottest quantum computing stocks in 2025, as the company has hit several major hardware milestones this year. This included demonstrating the industry’s largest multichip quantum computer and introducing a 100+-qubit chiplet system with 99.5% fidelity (a measure of precision in quantum computing). Rigetti is looking to introduce a 150+-qubit system with 99.7% fidelity in late 2026 and a 1,000+-qubit system with 99.8% fidelity in late 2027.
The company has also seen some commercial success. It received two orders totaling $5.7 million for its Novera quantum computing systems, which it will deliver in the first half of 2026. Meanwhile, it was awarded a three-year, $5.8 million contract by the Air Force Research Laboratory to develop a superconducting quantum network in collaboration with Dutch quantum computing company QphoX. Rigetti also became one of the first companies to join Nvidia(NASDAQ: NVDA) NVQLink platform for integrating quantum computers and supercomputers with artificial intelligence.
However, Rigetti experienced a setback when it was not one of the first 11 companies selected by the United States government’s Defense Advanced Research Projects Agency to advance to the second phase of its Quantum Benchmarking Initiative. The program was established to determine whether companies are on track to build a fault-tolerant quantum computer within the next decade.
One big advantage of Rigetti is that its superconducting qubits are fast, estimated to be 10,000 times faster than those used by IonQ. However, when it comes to quantum computing, 99.5% fidelity is considered extremely error-prone. In fact, data scientists do not recommend introducing other error reduction techniques until the hardware can achieve 99.9% fidelity.
With minimal returns and a technology that is considered error-prone, Rigetti is a highly speculative stock with a lot of risk. However, there is a less risky way to play this sector.
Image source: The Motley Fool.
while IBM(NYSE: IBM) is known as a legacy technology company, it has actually transformed into a quantum computing company. It also divested its low-gross-margin IT infrastructure services business, turning it into Extinguishing in 2021. Notably, he is also not involved in quantum computing as a side project such as Alphabet or Microsoft.
IBM is actually attacking quantum computing on two different fronts. With its new 120-qubit Nighthawk chip, it prioritizes quality over quantity. The company redesigned the chip’s layout to increase connections, which it expects will help it achieve a quantum edge, the ability to solve real-world problems better or cheaper than today’s supercomputers. The chip can handle problems that “require up to 5,000 two-qubit gates,” which is an important milestone in quantum computing because that’s the level that pushes it above today’s classical supercomputers. The company aims to reach 10,000 gates (operations) by 2027. Nighthawk is the chip that IBM is looking to use with IBM Cloud to run advanced simulations in the coming years.
At the same time, IBM also introduced a more experimental chip called Loon to help it develop a fault-tolerant quantum computer that doesn’t make mistakes. This chip is more specialized than the Nighthawk and can reset qubits during a nonstop calculation. IBM is looking for Loom to be the backbone of the first large-scale error-free quantum computer, Starling, in 2029.
IBM is also looking to take a page from Nvidia’s book with how Nvidia’s CUDA software platform has formed a moat around its graphics processing units. IBM created the Qiskit software platform for quantum research. Although it is open-source, unlike CUDA, which is proprietary, it has been optimized for IBM hardware.
IBM’s core business is still growing solidly, while generating plenty of operating cash flow that it can plow back into its quantum computing research. That makes IBM a much better risk-reward play than the cash-consuming Rigetti.
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Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, International Business Machines, IonQ, Kyndryl, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 January 2026 Microsoft calls and short $405 January 2026 Microsoft calls. The Motley Fool has a disclosure policy.
Forget Rigetti Computing: This Quantum Stock Offers Much Better Risk-Reward Right Now was originally published by The Motley Fool
