Forget Rigetti Computing and Buy This Safer Quantum Stock Instead

Quantum computing stocks have been all the rage over the past year, driving some astronomical returns for investors who had the foresight to buy these stocks at low prices. One quantum stock, Rigetti Computing (NASDAQ: RGTI), is trading up 667% in the past year (as of Dec. 3), and that's after dropping 57% since hitting all-time highs in October.

Some investors believe that quantum computers, which are expected to possess significantly more computing power than what's currently available in today's market, will one day be commercialized and replace traditional computers in many households and companies.

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While the potential for quantum computing is significant, many pure-play quantum stocks, such as Rigetti, remain high-risk, primarily because they trade at multibillion-dollar market caps and have very little revenue. That's why I would forget about Rigetti and invest in this safer quantum stock instead.

A more diverse business brings added safety

The iconic software and consulting company IBM (NYSE: IBM) has long been a staple in the stock market. The company was launched in 1911 and became a major player in the development of traditional computers, although it has since undergone numerous pivots.

One area it is currently focusing on is quantum computing, and many believe it is a leader in this burgeoning space. The company recently unveiled its latest and most advanced quantum system, called the IBM Nighthawk, which features 120 qubits interconnected by 218 next-generation tunable couplers. Quantum computers leverage qubits to process potential solutions to problems simultaneously. This makes them much more powerful than traditional computers, which rely on bits, the smallest unit of digital information that processes information sequentially.

Furthermore, IBM's Quantum Chief Technology Officer Scott Crowder said that by 2029, the company expects to produce quantum computers at scale that people can use to solve problems that traditional computers can't solve today.

Now, unless you really are an expert on quantum mechanics, I think it's hard to say with any real certainty whether quantum computers can be commercialized and how powerful they will actually be.

The good news is IBM is not just a quantum company. The company has invested significantly in generative artificial intelligence with services like Watsonx, which helps companies integrate AI tools into their core workflows. IBM also offers cloud consulting services. Investors have seen the company's transformation and rewarded the stock, driving it up by over 37% this year.

IBM generates tens of billions of dollars in revenue, almost all of which is from its software, consulting, and hardware business lines. This means investors can buy a solid technology company set to benefit from AI, essentially with a call option on quantum if it proves successful.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends International Business Machines. The Motley Fool has a disclosure policy.