Bernstein says that while it may be too early to call the eventual winners and losers in the quantum computing field, two stocks already show significant promise: Rigetti Computing and Infleqtion . In a Monday note to clients, Bernstein claimed that future technology profits lie in quantum computing. Rather than replacing traditional hardware, quantum computing will operate as a specialized accelerator, wrote a team of analysts led by Mark Newman. “Quantum computing is set to become the next important step in computing. We believe the future of advanced computing will be shaped by a tri-processor architecture composed of CPUs, GPUs, and QPUs,” Newman wrote, referring to central, graphics and quantum processing units. The current field, wrote Newman, is comprised of specialized pure-play companies alongside giant tech providers such as IBM , Google , Microsoft and Intel . But it’s far too early in the industry’s development to declare an ultimate winner. “We believe the market is unlikely to be winner-take-all,” Bernstein added. “Different modalities bring distinct strengths and tradeoffs, which should make certain architectures better suited for specific use cases, workloads, and time horizons. Some may be better positioned for near-term commercial relevance, while others may offer the stronger long-term path to scaled, fault-tolerant quantum computing.” Newman identified two companies that currently offer a more attractive risk-reward ratio than others. “RGTI and INFQ stand out to us: while RGTI is tied to superconducting and INFQ to neutral atoms, our framework indicates that current valuations imply only about 4% and 2% long-term market share, respectively,” the analyst wrote. “Put differently, the market does not appear to be pricing in significant [market] share for either company today, so if either ultimately captures larger market opportunity, the upside could be meaningful.” “We therefore see the setup as more favorable on a risk-reward basis, as investors can gain exposure to leading quantum modalities at relatively attractive valuations,” Newman and his team wrote in a 28-page report. In April, Mizuho reiterated its outperform rating on shares of Rigetti Computing. “We see RGTI continuing to refine its chiplet superconducting technology,” analyst Vijay Rakesh wrote, noting that Rigetti is well-capitalized with cash and equivalents of about $590 million at the end of last December, and recently sold a new 9-qubit Novera QPU to the University of Saskatchewan that “could drive some near-term optimism as it scales to 1,000 qubits.” Rakesh’s $33 price target implies that Rigetti could soar nearly 60% from Friday’s close of $20.68. Analysts at Citigroup and BTIG are similarly optimistic on shares of Infleqtion. In April, both banks initiated research coverage of with a buy rating. Citi’s $20 price target implies a rally of 37% from Infleqtion’s Friday close of $14.56, while BTIG’s $22 forecast would equate to 51% upside. “The overlap between quantum sensing and quantum computing has allowed Infleqtion to generate revenue and evolve as a company, all the while advancing its technology, as the market for quantum computing develops and scales,” wrote Citi analyst Atif Malik. Malik applauded a partnership , announced last year, between Infleqtion and dominant artificial intelligence chipmaker Nvidia , which will see Infleqtion integrate its neutral-atom quantum computer Sqale with Nvidia’s AI supercomputers. “We view Infleqtion’s ongoing partnership with Nvidia as a key validation of technology and suggests their software solutions are well positioned to address current AI use cases as well as future AI and quantum applications,” Malik added. Shares of Rigetti have soared 93% over the past year while Infleqtion, which came public last July, is ahead 39% in the past three months.
