D-Wave or Rigetti: Which Quantum Hardware Stock Should You Choose?

D-Wave Quantum (QBTS) reported strong Q1 2025 results, with revenues up 509% year-over-year to $15 million, driven by hardware sales, and a narrowed net loss to $5.4 million, leading to a surge of 123.8% in its stock price year-to-date; conversely, Rigetti Computing (RGTI) reported a 51% revenue decline and underperformed, despite securing government grants and a $35 million investment from Quanta Computer, positioning QBTS as the currently favored quantum hardware stock.

Analysis

D-Wave Quantum (QBTS) and Rigetti Computing (RGTI) presented contrasting first-quarter 2025 updates, highlighting divergent paths in the quantum hardware sector. D-Wave reported a significant 509% year-over-year revenue increase to $15 million, largely driven by a $12.6 million sale of its Advantage2 annealing quantum system to Julich Supercomputing Center. This, coupled with a 61% jump in commercial revenues, propelled its GAAP gross margin to 92.5% from 67.3% and non-GAAP gross margin to 93.6% from 76.6%. Consequently, D-Wave's net loss narrowed to $5.4 million (2 cents per share), its lowest since going public, and its adjusted EBITDA loss decreased by 53% to $6.1 million. The company also strengthened its balance sheet, ending March 2025 with $304.3 million in cash, having repaid its secured term loan and reduced its debt-to-capital ratio to 12.9%. In stark contrast, Rigetti Computing experienced a 51% year-over-year decline in first-quarter revenues, which also missed expectations, reflecting weak demand despite securing notable research funding, including selection for DARPA’s Quantum Benchmarking Initiative and a $5.48 million AFOSR grant. Rigetti did receive a $35 million strategic equity investment from Quanta Computer, boosting its cash position to $237.7 million. Year-to-date, QBTS shares have surged 123.8%, outperforming the industry and S&P 500, while RGTI shares declined 8.2%. This performance disparity is reflected in their Zacks Ranks, with QBTS at #2 (Buy) and RGTI at #4 (Sell), underscoring D-Wave's current momentum in commercialization and financial improvement versus Rigetti's research-focused progress but lagging commercial uptake and financial results.

Key Decisions for Investors

• Investors should note D-Wave Quantum's (QBTS) robust Q1 2025 financial performance, characterized by substantial revenue growth from hardware sales, significantly improved gross margins, and a narrowing net loss, which collectively indicate a strengthening commercial trajectory and a clearer path towards profitability.
• Caution is advised regarding Rigetti Computing (RGTI) due to its significant Q1 revenue decline and projections for flat-to-lower full-year revenues, suggesting challenges in current market adoption despite its achievements in securing research grants and strategic investments.
• Given D-Wave's demonstrated commercial success and positive stock performance year-to-date compared to Rigetti's underperformance and revenue challenges, QBTS currently presents a more compelling investment case for exposure to the quantum hardware sector based on near-term financial momentum and market validation.