IBM, D-Wave, Rigetti All Surged. They Are Not the Same Investment

Thursday's quantum computing rally treated IBM (IBM), D-Wave Quantum (QBTS), and Rigetti Computing (RGTI) as a single trade. IBM rose 12%, QBTS surged 33%, RGTI jumped 30%. But investors buying any of these three names are making fundamentally different bets.

IBM: The diversified incumbent

IBM is first and foremost an enterprise technology company with a USD 200 billion market capitalisation and USD 62 billion in annual revenue. Quantum computing is one division inside a much larger business that includes consulting, hybrid cloud, and AI services.

The USD 1 billion government grant is meaningful for its quantum roadmap, but it moves IBM's overall financials by less than 2% of annual revenue. IBM is the lowest-risk way to gain quantum exposure — but also the lowest-leverage play. If quantum computing becomes a USD 100 billion industry over the next decade, IBM captures some of it. QBTS and RGTI capture more of it on a percentage basis, if they survive.

D-Wave Quantum (QBTS): The commercial pioneer with a different architecture

D-Wave, founded in 1999, is the oldest pure-play quantum company and the only one with a sustained commercial customer base. Its technology uses quantum annealing rather than the gate-based qubit approach used by IBM and most other players. This makes it better suited for specific optimisation problems (logistics, scheduling, financial modelling) but less general-purpose than gate-based systems.

With a market cap in the USD 1-2 billion range, the USD 100 million grant represents a major cash infusion. Revenue has been growing but remains well below USD 100 million annually. The valuation already prices in significant future growth.

Rigetti Computing (RGTI): The highest-risk, highest-upside pure-play

Rigetti is building gate-based superconducting quantum processors, directly competing with IBM's architecture. It went public via SPAC in 2022 at a valuation that proved optimistic, and the stock spent much of 2023-2024 under significant pressure.

The USD 100 million grant is transformational at Rigetti's scale. It provides runway that the company's own revenue generation has not been able to sustain independently. The technology roadmap is credible, but commercial scale is further out than the other two.

The framework for investors

The grant sizes were similar in dollar terms. The impact on each company is not. Position sizing should reflect that difference. 📊