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The stock market had a turbulent year. However, quantum computing stocks have navigated the volatility and recorded impressive returns. The Defiance Quantum ETF QTUM outperformed the broader S&P 500 over the past year (+42% vs. +12.3%). Significant contributors to the gains in QTUM include IonQ, Inc. IONQ and D-Wave Quantum Inc. QBTS, which rose by 409.7% and 1,447.4%, respectively, in a year.

But does D-Wave Quantum’s outperformance in the last 12 months against IonQ indicate a better buy, or would you prefer the latter? Let’s find out –

Reasons to Be Bullish on IonQ

IonQ’s first-quarter revenues of $7.6 million may have remained unchanged from a year ago, but the company has issued encouraging full-year revenue guidance. After acquiring Lightsynq, the company anticipates doubling its 2024 revenues to fall between $75 million and $95 million for the year.

IonQ is also heading toward profitability. IonQ narrowed its first-quarter non-GAAP loss to $0.14 a share from a loss of $0.19 a share a year ago. IonQ has made substantial progress as its unique linear ion chains in quantum computing help it to surpass 100 qubits and reduce errors compared to other quantum computers. The company has grown its customer base for some time. Notable among them are AstraZeneca PLC AZN and ANSYS, Inc. ANSS, to name a few (read more: Can IONQ be the Next NVIDIA, and Is It a Buy?).

Reasons to Be Bullish on D-Wave Quantum

D-Wave Quantum’s financial performance has been imposing, too. D-Wave Quantum’s first-quarter revenues skyrocketed to $15 million, a 509% increase from a year ago. D-Wave Quantum was able to meet its customer obligations and reduce its liabilities, indicating a path to profitability. D-Wave Quantum finished the quarter with $304.3 million in cash, which can sustain operations until profitability.

D-Wave Quantum’s revenue growth is driven by increased interest in its technology. The company’s 6th-generation Advantage2 quantum computer can solve problems in 20 minutes, which supercomputers may take almost 1 million years.

CEO Alan Baratz recently said that the Advantage2 quantum computer is “so powerful that it can solve hard problems outside the reach of one of the world's largest exascale GPU-based classical supercomputers.” D-Wave Quantum also boasts a strong customer base with notable clients, such as Lockheed Martin Corporation LMT and Deloitte (read more: Here's Why D-Wave Stock Promises High Growth and Is a Buy).

Should You Buy IONQ or QBTS for Quantum Computing Stock?

Both IonQ and D-Wave Quantum are on track to become profitable. IonQ’s ion trap architecture provides scalability and a competitive edge, while D-Wave Quantum focuses on quantum annealing for solving complex problems, potentially driving revenue growth and boosting investments.

However, quantum computing’s practical applications remain limited as it is an unproven market. Therefore, placing bets on both speculative stocks may heighten risk. Yet, risk-tolerant investors may prefer focusing on one stock for potential gains when the market recognizes quantum computing’s true value.

IonQ should be the preferred choice over D-Wave Quantum since the company has a larger intellectual property portfolio, including 950 patents related to quantum computing. Its recent acquisitions of Lightsynq, ID Quantique and UK quantum computing firm Oxford Ionics have strengthened its business position in the quantum space.

Moreover, IonQ stock is less pricey on a relative basis compared to shares of D-Wave Quantum since it has a price-to-sales (P/S) ratio of 212.84. D-Wave Quantum is trading at a P/S ratio of 240.66.

IONQ – P S Ratio (TTM)

QBTS – P S Ratio (TTM)

And of course, let’s face it, IonQ’s CEO, Niccolo de Masi, sounds more optimistic as he believes the company will lead the field like NVIDIA Corporation NVDA. Others have imitated, but have always trailed behind. IonQ has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.

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Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

AstraZeneca PLC (AZN) : Free Stock Analysis Report

NVIDIA Corporation (NVDA) : Free Stock Analysis Report

ANSYS, Inc. (ANSS) : Free Stock Analysis Report

Defiance Quantum ETF (QTUM): ETF Research Reports

IonQ, Inc. (IONQ) : Free Stock Analysis Report

D-Wave Quantum Inc. (QBTS) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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