Are Pure Play Quantum Computing Stocks a Buy in October?

Quantum computing stocks, including IonQ, D-Wave, and Rigetti, have experienced substantial year-to-date rallies, with gains up to 289%, driven by technological breakthroughs and strategic government and institutional investments. Despite this momentum and long-term market potential, these companies exhibit extreme valuations, trading at 300 to over 1,100 times trailing sales, with profitability years away (e.g., IonQ by 2030) and current revenues often minimal or declining. This divergence between market capitalization and fundamental financial performance highlights a speculative rally, pricing in future perfection amidst significant cash burn and intense competition.

Analysis

Key PointsIonQ trades at 303-times trailing sales with profitability not expected until 2030. D-Wave stock has surged 289% year-to-date while analysts project just $74 million in revenue by 2027. Rigetti Computing stock commands a 1,110-times sales multiple despite Q2 2025 revenue falling 42% year-over-year. - 10 stocks we like better than IonQ › IonQ trades at 303-times trailing sales with profitability not expected until 2030. D-Wave stock has surged 289% year-to-date while analysts project just $74 million in revenue by 2027. Rigetti Computing stock commands a 1,110-times sales multiple despite Q2 2025 revenue falling 42% year-over-year. The quantum computing rally of 2025 defies conventional logic. IonQ (NYSE: IONQ) up 75%, D-Wave Quantum (NYSE: QBTS) up 289%, Rigetti Computing (NASDAQ: RGTI) up 162% -- all since January. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks » The catalysts are legitimate. China just demonstrated a 12,900-kilometer quantum satellite link. DARPA pledged $1 billion to achieve utility-scale quantum computing by 2033. The U.S. government is scrambling to deploy quantum-resistant encryption before "Q-Day" -- the moment when quantum computers become powerful enough to break current encryption standards, threatening everything from bank transactions to national security. With institutional money flooding in and governments treating quantum as a national security priority, these stocks might be worth the premium despite astronomical valuations. Each company has made breakthroughs suggesting one could capture a market McKinsey estimates will reach $850 billion by 2040. But are the pure play quantum computing stocks actually buys in October? Let's examine each company's technology and financials to find out. Room temperature advantage IonQ stands out by avoiding the cryogenic cooling that most quantum competitors require. Its trapped-ion systems operate at room temperature, a potential advantage for scaling and cost efficiency. The recent $1 billion Oxford Ionics acquisition targets 800 logical qubits by 2027, and partnerships with AstraZeneca and Amazon Web Services point to commercial applications starting to form. The balance sheet remains strong with about $1.6 billion in cash after a mid-2025 raise. The challenge is valuation. IonQ trades at more than 300-times trailing sales, with revenue projected to reach about $100 million in 2025 and profitability unlikely before 2030. This valuation only makes sense if trapped ions prove to be the winning approach in quantum computing, despite competition from IBM, Microsoft, and Alphabet with much larger budgets. Optimization over universal D-Wave's quantum annealing technology focuses on optimization problems such as routing, scheduling, and portfolio management. A pilot with North Wales Police showed the potential -- deployment puzzles that took classical systems four months were solved in four minutes, cutting response times in half. The sixth-generation Advantage2 system is already delivering measurable enterprise value. D-Wave's valuation remains the key hurdle. Analysts see only $70 million to $75 million in annual revenue by 2027, yet the company trades at more than 300-times trailing sales. Even with July's $400 million raise, bringing cash to $819 million in the most recent quarter, the gap between current valuation and projected revenue growth is wide. Without faster adoption, the rally risks outrunning fundamentals. A bold valuation Rigetti Computing continues to push the envelope in quantum hardware. The company has demonstrated 99.5% two-qubit gate fidelity, roughly doubling the fidelity of earlier systems, and secured a $35 million investment from Quanta Computer as part of a broader $200 million technology partnership. The U.S. Air Force awarded $5.8 million for quantum networking research with Rigetti, and the company plans to debut a 100-qubit system later this year. But the financials tell a harsher story. In its latest quarter, Rigetti's revenue fell 42% year-over-year to about $1.8 million, while it posted a net loss of $40 million. Its cash reserves of $572 million offer somewhat of a runway, but the burn rate is steep compared to commercial traction. At above 1,100-times sales, the valuation essentially assumes that Rigetti's technical edge will translate into real customers and deals -- a leap no amount of circuit-level performance guarantees. Speculation at any speed The disconnect between promise and profit has never been wider. These companies face massive cash burn while competing against tech giants with virtually unlimited resources. This technology will transform computing, but picking winners among cash-burning start-ups requires extraordinary conviction about which approach ultimately succeeds. For speculators comfortable losing everything, it might be smart to allocate 1% to 2% of your portfolio maximum across all three. For investors seeking growth at reasonable prices, look elsewhere. The fact of the matter is that the quantum computing rally prices in perfection from companies still years away from profitability. Revolutionary technology at extreme valuations has historically been a challenging combination for investors, regardless of the ultimate success of the underlying innovation. Should you invest $1,000 in IonQ right now? Before you buy stock in IonQ, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and IonQ wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $621,976! Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,150,085! Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 191% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor. Stock Advisor returns as of September 29, 2025 George Budwell has positions in D-Wave Quantum, IonQ, Microsoft, and Rigetti Computing. The Motley Fool has positions in and recommends Alphabet, Amazon, International Business Machines, and Microsoft. The Motley Fool recommends AstraZeneca Plc and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The pure-play quantum computing sector, including IonQ (IONQ), D-Wave Quantum (QBTS), and Rigetti Computing (RGTI), is experiencing a significant rally driven by legitimate long-term catalysts such as government funding and strategic national security imperatives like quantum-resistant encryption. Despite stock surges of up to 289% year-to-date for D-Wave, the sector's valuations are disconnected from current financial realities. These companies trade at extreme multiples, with IonQ at 303-times and Rigetti at 1,110-times trailing sales, while profitability remains a distant prospect, not expected for IonQ until 2030. Rigetti’s situation is particularly stark, with a 42% year-over-year revenue decline to $1.8 million in its latest quarter against a $40 million net loss. While these firms possess notable cash reserves and have achieved technical milestones—such as IonQ’s room-temperature approach and D-Wave's optimization successes—their high cash burn rates and intense competition from heavily capitalized tech giants like IBM, Microsoft, and Alphabet present substantial risks. The current market pricing appears to factor in a level of perfection and future market dominance that is highly speculative and not supported by near-term revenue projections or profitability paths.

Key Decisions for Investors

• Investors should exercise extreme caution due to the astronomical valuations of IONQ, QBTS, and RGTI, which are not supported by current revenues or near-term profitability forecasts.
• For those with a very high risk tolerance, any exposure to this sector should be considered purely speculative and limited to a minimal portfolio allocation, acknowledging the significant risk of capital loss.
• It is prudent to monitor key fundamental milestones, including commercial adoption rates, cash burn, and progress from larger competitors like IBM and Microsoft, before committing significant capital to these pure-play quantum firms.