Rigetti and D-Wave Just Got $100 Million Each. 1 Quantum Stock Has More Upside From Here.

The quantum computing sector continues to evolve, with companies still trying to overcome technical and commercial hurdles. Amid the challenges, D-Wave Quantum (QBTS) and Rigetti Computing (RGTI) have just received an important vote of confidence from the U.S. government. Both companies have secured as much as $100 million each through the CHIPS and Science Act, in deals that give the Department of Commerce a minority ownership position without control over either company.

With access to significant capital to advance their quantum-computing ambitions, the question now is what each company can actually do with this money. And that is where the case for D-Wave looks more intriguing.

Rigetti Has A Big Technical Challenge To Solve

Rigetti plans to use its $100 million award to tackle some of the biggest scaling problems facing superconducting quantum computers. Its projects include shrinking readout electronics, expanding cryogenic capacity and developing manufacturing capabilities for higher-connectivity chip architectures. These projects will eventually help Rigetti build larger and more useful quantum systems. However, all this relies on the company successfully overcoming technical bottlenecks that sit further along the commercialization curve.

This is exactly where D-Wave has an advantage.

D-Wave could Accelerate Its Commercial Opportunity

Specifically, D-Wave enters this new funding cycle with a growing base of customers already putting its technology into production. In the second quarter, commercial enterprises generated 62.4% of D-Wave's revenue, out of which companies in the Forbes Global 2000 accounted for 47.7%. This suggests that D-Wave is increasingly expanding into larger businesses with possibly much larger application needs.

Q2 revenue came in at $3.1 million, unchanged from the year-ago quarter. However, bookings climbed 59% year over year (YOY) to $2.1 million, while the average booking size increased more than 87%. D-Wave's bookings reached $35.5 million in the first six months of the year, a sharp increase from the same period last year, largely reflecting a $20 million system deal with Florida Atlantic University. The company is signing larger commitments that can be converted into revenue over time. Its remaining performance obligations (or RPO) reached $40.7 million, up 668% from a year earlier, with 57% expected to be recognized as revenue within the following 12 months.