IonQ (IONQ), Rigetti Computing (RGTI) and D-Wave Quantum (QBTS) were in the spotlight on Thursday as investment firm Mizuho Securities initiated coverage on the quantum computing industry.
IonQ, Rigetti and D-Wave Quantum were all given Outperform ratings and price targets of $90, $50 and $46, respectively.
“[Quantum computing] promises a major transformation in high performance compute (HPC) following in the steps of CPUs and GPUs,” Mizuho analyst Vijay Rakesh wrote in a note to clients. “We note: [Quantum computing] can drive exponential [more than] 10,000x performance improvement vs. classical/AI compute; while near-term revenues could be lumpy, we see the industry beginning the steepest part of the S-curve driving revenues/earnings to 2035E and beyond; and we estimate [quantum computing total addressable market] growing from ~$1B in 2025E to ~$205B in 2035E — ~100x in 10 years. We believe [quantum computing] drives a new paradigm that offers exponential opportunities to 2035-40E as investors look for the next NVDA.”
Delving deeper, Rakesh said he sees IonQ as a leader in the quantum computing space, given that it has low error rates with trapped ions and a higher coherence time, which could drive a faster commercial ramp. It also has a full-stack solution, with computing, networking and sensing.
Rigetti could benefit as it gets to more than 150 qubits by 2026 and more than 1,000 by 2027, with a 99.8% gate fidelity rate, Rakesh said. It also has more than $450M in cash and equivalents, which suggests it may not need to raise money until at least 2030. It’s also the “closest scalable superconducting [quantum computing] peer to IBM and Google,” Rakesh added.
D-Wave is on a dual track to annealing and gate model, with the potential for M&A, Rakesh said. It is also the “dominant” quantum appealing player in the near-term emerging optimization market, which accounts for roughly 20% of the total quantum computing market.