While artificial intelligence (AI) advancements primarily dominated news cycles over the past year, veteran hedge fund manager David Kass predicts AI will soon be replaced by quantum computing as the new hot technology innovation.
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Quantum computing is quickly advancing at the front of a fast-growing frontier of technology, and tech companies are starting to recognize its potential to accelerate computational power, further changing how we live and work.
A highly advanced type of computing based upon the principles of quantum mechanics, quantum computing could spark the next tech sector gold rush for investors in 2025.
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Quantum computing can significantly enhance AI capabilities thanks to faster data processing that improves machine learning algorithms. As a result, many companies are investing in quantum computing, but there are likely to be winners and losers.
Some financial experts experts are highly bullish on quantum computing stocks, many of which have surged recently.
Quantum computing simplified
Quantum computing is a highly advanced form of computing in which tasks are performed at a much faster rate. A standard computer typically works one step at a time, while a quantum system can perform multiple tasks at once.
“These systems utilize quantum bits (qubits) of information to solve complex problems at significantly higher speeds than traditional computers, doing so by leveraging the principles of quantum mechanics,” reports TheStreet.Â
As companies double down on large language models (LLMs) to continue AI innovations, the need for advanced computational power is increasing.Â
Companies in the quantum computing space may be the ones to fill this demand. And as some experts see it, this means high growth potential for a few quantum computing stocks.
Experts are bullish on three quantum computing stocks.
No. 1: Quantum Computing
The company has the same name as its field and has enjoyed an outstanding year. Quantum Computing (QUBT)  stock gained almost 2,000% in 2024, rising from less than $1 per share to more than $18 in only a few months.
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Stephen Guilfoyle is a veteran Wall Street trader whose career began on the New York Stock Exchange floor in the 1980s.
In a post for TheStreet Pro, Guilfoyle revealed he owns QUBT stock. On December 24, he highlighted the company’s growth potential, stating, “Quantum Computing (QUBT) is expected to grow revenue 167% for the current quarter, 40% for the full year, and 200% next year.”
In November 2024, Guilfoyle noted that he had been trading QUBT because of its positive price action, highlighting that the sector could be poised to take off. He acknowledges that the stock remains a purely speculative play but sees growth potential for the sector accelerating. Overall, he thinks the industry “is going to be a 2026 or 2027 story.”
While that may be true, the company isn’t currently profitable, and there’s no telling when it might be.Â
Quantum Computing’s most recent quarterly earnings report revealed a loss-per-share of six cents on revenue of less than $200,000. In 2025, it’s only expected to generate revenue of $1.5 million, yet its market cap is $2.25 billion following its meteoric run-up.
No. 2: D-Wave Quantum Systems
D-Wave Quantum Systems (QBTS)  may not be as well known as some of its peers, but like QUBT, its shares have soared this year, rising more than 1,000%, including gains of almost 750% over the past two quarters.
While the stock trades below $10 per share, bullish sentiment from Wall Street has risen. For example, Benchmark recently raised its price target to $8 from $3. QBTS has already surpassed that target.
TheStreet’s Rob Lenihan reports that “Benchmark said it believes the company’s recent balance sheet recapitalization, a decision that companies often make to stabilize their capital structure, “eliminates much of the risk discount that has remained an overhang since its public debut” following a meeting with D-Wave’s CFO, John Markovich, during Benchmark’s Discovery Conference.
Since it made the decision to recapitalize in 2022 through a business combination with DPCM Capital, D-Wave has raised $75 million in additional capital through an at-the-market (ATM) equity offering. It also reported a 41% year-over-year (YOY) increase for QCaaS (Quantum Computing as a Service) revenue for Q3, 2024, while fiscal revenue for the year increased 11%.
Like rival Quantum Computing, it’s losing money. Last quarter, its loss-per-share was 9 cents.
Analysts remain bullish on QBTS stock for 2025, though, predicting revenue of $15.07 million, a 64% increase from last year.
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Four other Wall Street firms currently maintain a Buy rating for D-Wave with no Holds or Sells.Â
Its market cap has swelled to $2.47 billion, giving D-Wave a price-to-sales ratio of 168.
No. 3: IonQ, Inc.
A noted quantum computing hardware and software producer, IonQ (IONQ)  hasn’t surged by as much as Quantum Computing or D-Wave. However, shares are still up 250% for the year, and experts remain bullish on its growth prospects.
DA Davidson recently initiated a Buy rating for IONQ and set a bullish $50 price target.
Lenihan notes that DA Davidson “believes IonQ represents “a compelling pure-play investment positioned to capitalize on quantum computing’s rapid growth,” driven by the increasing inadequacy of classical computing for solving complex problems.
As its name implies, IonQ’s work centers around trapped ion technology, in which ionized atoms perform quantum computations. These atoms have gained or lost electrons, leading to a net electrical charge.Â
Experts have described IonQ’s core technology as highly scalable, noting its ability to perform the increasingly complex calculations that leading tech companies require. Additionally, it allows businesses and researchers to access quantum resources more easily, possibly granting it an edge over competitors.
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Over the past quarter, Wall Street has given IonQ 4 Buy ratings and 1 Hold rating. The company reported $12.4 million in revenue for Q3 2024, which works out to 102% year-over-year growth. Analysts predict that 2025 revenue will reach $84.75 million, a gain of nearly 100%.Â
This company’s list of partnerships with clients includes Amazon Web Services (AWS) and the United States Air Force Research Lab. The company recently announced a partnership with engineering firm Ansys (ANSS)  to bring quantum computing to the $10 billion computer-aided engineering (CAE) market.
Last quarter, IonQ lost 12 cents per share. Its market cap is $10.3 billion, giving it a price-to-sales ratio of 267.
Two more potential quantum computing market winners
No. 1: Rigetti Computing
Another member of the 1,000% return club in 2024 is Rigetti Computing (RGTI.) Â
Rigetti Computing’s stock price is up almost 1,900% in the past year. It develops quantum integrated circuits, a key component for quantum computers, which may prove to be a highly lucrative niche.Â
Additionally, its technology combines the elements of quantum and classical computing and can offer easy integration with a client’s current technology infrastructure.
In December, Craig-Hallum issued a Buy rating for Rigetti and set a $12 price target, which the stock has already exceeded. It now trades at more than $19 per share after surging more than 564% in the past month.
Other Wall Street banks remain highly bullish on RGTI. It has six Buy ratings for the past quarter, with no Holds or Sells. The company reported revenue of $2.38 million, which brought its revenue for the year to $11.89 million, a decrease of 19%.Â
Additionally, Rigetti’s balance sheet shows $22.49 in debt and only $20.29 in cash and equivalents.
No. 2: Alphabet
Google’s parent company isn’t regarded purely as a quantum computing stock. But Alphabet (GOOGL)  made a significant advancement this year with Willow, its “state-of-the-art quantum computing chip,” which stands to significantly impact multiple areas of technology through its advanced computational power.
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As TheStreet’s David Dierking notes,” If this chip becomes practical and stable at any point in the near future, we could be looking at huge advances in everything from medicine to scientific research to mathematics to exploration.”
Dierking highlights the Defiance Quantum ETF ( (QTUM) ) as an excellent way to play the quantum market following Google’s Willow progress.
Google is still considered a Strong Buy on Wall Street, not just because of its quantum computing exposure. It’s also a major player in AI thanks to its large-language model, Gemini, and a Goliath in search and entertainment. Twenty-five analysts currently rate it as a Buy, while only six maintain Hold ratings.
Quantum computing stocks: The risks
The share prices of these quantum computing stocks have surged over the past year, so it’s important to exercise some caution.Â
Quantum Computing Inc., founded in 2018, is still in a fairly early stage of development. D-Wave only began trading on the stock exchange in 2022. These companies show little revenue and are still losing money.
As such, traditional valuation metrics may not apply to them as they do for larger, more established stocks, making these stocks difficult to assess properly.
Tech stocks often trade at a price-to-sales range of 10 to 20 and are often seen as bargains when their P/E ratios are either near 5-year lows or below 20. These stocks boast ratios much higher than that.
“I think I have identified Quantum Computing as a stronger play than D-Wave and therefore have more exposure there, but we really do not know who the winners will be,” Guilfoyle notes.
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