Quantum computers hold the potential to evolve artificial intelligence (AI) and the broader computing industry to unprecedented heights. The properties of quantum mechanics enable these devices to execute complex calculations beyond the abilities of the most powerful supercomputers.

Among the businesses racing to capture a piece of this market is pure-play quantum company Rigetti Computing (RGTI 1.56%) and tech goliath Microsoft (MSFT 0.89%). Many avenues exist to pursue quantum technology, and these two are taking radically different paths to quantum advantage, the point at which today's computers can no longer keep pace with quantum machines.

Rigetti's singular focus on quantum computers may provide an edge over Microsoft, which has its fingers in many pies from cloud computing to video games. Or does Microsoft's deep pockets give it the advantage?

Here's a look into both companies to help you decide which is a worthwhile investment in the nascent quantum computing industry.

Image source: Getty Images.

Rigetti Computing's quantum approach

Rigetti's tech employs superconducting qubits, an older, more common method to constructing a quantum computer. Qubits are the basic units of information in quantum computing, akin to a bit on a classical computer. While bits represent either 0 or 1, qubits can be both at the same time.

One of the factors making Rigetti's solution unique is that its patented technology combines quantum devices alongside classical computers in a hybrid approach. This is important because qubits are difficult to control, so are prone to calculation errors. Using a hybrid technique helps catch and correct these errors.

In addition, Rigetti is the first company to offer a full stack quantum solution, according to the company. This means it handles the entire end-to-end process, from designing and building a quantum chip to delivering the software to operate the quantum computer. In fact, the company claims to own the first foundry dedicated to quantum chip manufacturing.

However, Rigetti's tech hasn't translated into revenue growth. The company's first-quarter sales totaled $1.5 million, down from $3.1 million in 2024. This result extends the trend seen in 2024 when Rigetti ended the year with $10.8 million in revenue, a drop from 2023's $12 million.

Microsoft's breakthrough quantum tech

Microsoft chose a different path to creating a quantum computer. It's pursuing topological qubits, a new technology that promises greater stability and scalability, compared to Rigetti's superconducting qubits.

Topological qubits allow simpler error detection and correction. This opens up the opportunity to quickly scale up a quantum computer, enabling a faster path to quantum advantage.

Microsoft is uniquely positioned to benefit from topological qubit technology, thanks to its substantial financial resources. The conglomerate generated revenue of $70.1 billion and free cash flow (FCF) of $20.3 billion in its fiscal third quarter, ended March 31.

Its significant FCF allowed the tech giant to invest in the creation of the world's first topoconductor, a new type of material that enabled the use of topological qubits. The breakthrough led to Majorana 1, the first quantum computer processor powered by topological qubits. This chip can hold 1 million qubits. By contrast, Rigetti's system can support 100 qubits.

However, Microsoft's tech is still in its infancy. While the company created Majorana 1, it has yet to build a complete quantum computer using topological qubits.

Picking between Rigetti Computing and Microsoft

Microsoft's quantum technology sounds impressive, but the conglomerate expects it will take years to get a prototype quantum computer built using topological qubits. Meanwhile, Rigetti formed a partnership with Quanta Computer, which purchased Rigetti stock for $11.59 per share and provided much-needed financial support.

Another consideration is stock valuation. The price-to-sales ratio (P/S) can help to assess this by measuring how much investors are willing to pay for every dollar of revenue, based on the previous 12 months. The chart below shows how Rigetti's P/S stacks up against Microsoft's.

Data by YCharts.

Rigetti's P/S has been on a roller-coaster ride this year but consistently remained far higher than its larger rival. This means its stock is overpriced, compared to Microsoft.

Although Rigetti's quantum capabilities may prove to be the superior solution one day, the company's declining year-over-year revenue trend is concerning. If Quanta Computer hadn't stepped in, Rigetti's business may not have survived to see if it possesses the better quantum computer.

For these reasons and given the significant financial strength Microsoft can bring to solve quantum technology's challenges, Microsoft is the better long-term investment between these two companies battling for quantum computing supremacy.