Are These 3 Quantum Computing Stocks Worth Buying Before 2027?

Aside from artificial intelligence, quantum computing is currently one of the most anticipated technology trends in the market. Investors are hoping that in the coming years, quantum computing companies will make significant breakthroughs that shift the industry toward widespread adoption.

Three companies that are leading the pack are IonQ (NYSE: IONQ), D-Wave Quantum (NASDAQ: QBTS), and Rigetti Computing (NASDAQ: RGTI). Unfortunately for their shareholders, their share prices have all declined recently.

Year to date, IonQ stock is down 26%, Rigetti has tumbled 44%, and D-Wave has plunged 53%.

Given their sell-offs, you might think it's worth buying these quantum computing stocks while they're seemingly on sale. But it's probably best to hold off for now, or at least proceed very cautiously. Here's why.

Image source: Getty Images.

1. IonQ has potential, but its losses are significant

IonQ stock is often a top choice for quantum computing investors, and I'll admit the company has a few things going for it.

For one, it has $3 billion in cash and cash equivalents. That gives the company plenty of runway as it develops its tech and is more than enough to ease any investor fears about the company being able to stick around for the long term.

IonQ also generated significant revenue in the second quarter, with sales rising 287% to $80.1 million. Much of that growth was fueled by acquisitions, rather than organic growth. Still, IonQ management said recently that organic sales growth will expand over the coming years, with total sales reaching $1 billion and the company achieving profitability by 2030.

So, what's the problem? IonQ is currently very unprofitable, and its losses are widening. IonQ's non-GAAP EBITDA (earnings before interest, taxes, depreciation, and amortization) loss was $120.3 million in the second quarter, much worse than its $36.5 million loss in the year-ago quarter.

2. D-Wave's stock is expensive, and the company's sales are unpredictable

Quantum computing sales can be unpredictable for most companies, but D-Wave's are especially lumpy because they mostly come from selling its equipment to researchers or universities. That means there can be quarters with significant sales and others with little.

And the second-quarter revenue was one without much. Revenue was just $3.1 million, while its adjusted EBITDA loss was $37.1 million. If there's good news, it's that D-Wave has about $546 million to keep the lights on.

Investors who are tempted by D-Wave's 1,700% gains over the past three years should keep in mind that soaring returns and a lack of sales mean that you'll pay a hefty premium for its shares. D-Wave's price-to-sales (P/S) ratio is an astronomically high 333, compared to the tech sector average P/S ratio of just 6.

3. Rigetti doesn't look much better

Regetti is another top pick among many tech investors, and some were encouraged by the company's 185% sales increase in the second quarter. The problem is that total revenue was just $5.1 million, and its operating loss for the quarter was $28.1 million.

Investors looking for Rigetti's business to take off in 2027 may be disappointed. Management has said it won't achieve quantum advantage -- when quantum computers quickly solve problems traditional computers can't -- for another three years. Until it does, meaningful sales will likely be minimal.

Like the other companies on this list, Rigetti has enough money to keep things running, with $541 million in cash. But, like some of its peers, its stock is also very pricey. Rigetti's shares have a P/S ratio of 283.

Is it worth taking a risk on quantum computing stocks?

For the most part, I think putting a significant amount of money or allocating a substantial percentage of your portfolio to a pure-play quantum computing stock isn't a good idea right now.

But if you want to start a small position in IonQ, that may make sense, given that the company is seeing revenue gains and its shares are far less expensive than its peers'.

Just remember that commercial viability and real-world use cases for quantum computing are still at least several years away, so putting any money toward these stocks right now is a risky bet.

Chris Neiger has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.