Quantinuum vs. IonQ: Why One Major Wall Street Firm Says This Stock Is the Better Bet

Morgan Stanley analysts recently designated Quantinuum (QNT) as their top pick in the quantum computing sector, following its recent IPO. Analyst Joseph Moore upgraded his rating on the stock from "equal-weight" to "overweight," while lowering his price target from $78 to $68. In contrast, Moore maintained an "equal-weight" rating on IonQ (IONQ), reducing his price target from $49 to $43.

The analysts believe that the quantum computing market could reach over $100 billion by 2040. They have developed a framework to evaluate quantum stocks based on four factors: technology, execution, manufacturability, and commercialization. Moore emphasized that technology carries the most weight in their assessment, and Quantinuum stands out in this category. Notably, Quantinuum has reached Stage 7 of Morgan Stanley's eight-stage error-correction framework, outperforming IonQ, which has only achieved Stage 4.

Quantinuum's error-correction operations are also 4.3 times more reliable than those without it. The stock's price-to-sales (P/S) multiple is the lowest among the group based on 2030 revenue estimates. Moore forecasts Quantinuum to generate $2 billion in revenue in 2030, compared to IonQ's $1.8 billion.

While IonQ leads in physical qubit performance, with a record of 99.99% two-qubit gate fidelity, Quantinuum edges ahead in quantum error correction, boasting 99.92% accuracy. IonQ recently announced a breakthrough in end-to-end, real-time quantum error-correction decoding using a conventional CPU. However, Quantinuum is preparing to surpass IonQ with its new Sol system, aiming for a 99.999% logical fidelity.

Both companies utilize the trapped-ion approach for their quantum machines, but IonQ has transitioned from laser manipulation to microwave antennas embedded into its chips, potentially providing IonQ with a scalability and commercial viability advantage. IonQ's LightSynq acquisition contributes to its high-bandwidth photonic interconnects, allowing seamless quantum chip integration.

Meanwhile, Quantinuum's software expertise and IonQ's acquisition of quantum foundry SkyWater and quantum security, transmission, and sensing companies position both as contenders in the quantum ecosystem.